Why does the stock market react to earnings reports

Assignment Help Business Economics

Reference no: EM13976939

The following type of report occurs each quarter as firms announce their earnings: Weaker-than-expected results last week from Exxon Mobil have set a gloomy backcloth for results on Thursday from Royal Dutch/Shell. A consensus of Wall Street analysts polled by Thomson Financial/First Call had projected Chevron Texaco would report earnings of 70 cents per share. However the company said that after excluding special items and merging related expenses and both periods, operating earnings were 931 million (.88 cents). Using that math, the company beat the analysis; figure by .18 cents. The company said it lost 154 million in the first quarter, compared with the year ago quarter, in reframing, marketing, and transportation operations. The company said its profit margins in the last sector were at their lowest levels since the mid 1990?s. Chevron stock closed up .90 cents, to $85.90, yesterday on the New York Stock Exchange.

a) Why does the stock market react to earnings reports? b) What do the earnings mean?

Reference no: EM13976939

Questions Cloud

Describe how the equilibrium changes : Suppose that the demand curve for wheat is Q = 100 - 10p and the supply curve is Q = 10p. The government imposes a price ceiling of p = 3. Describe how the equilibrium changes. What effect does this ceiling have on consumer surplus, producer surplus,..

What is the best choice of hours for this worker : The benefit function is given by B(H) = 500H 22.5H2 and the cost function is given by C(H) = 100 + 15H2. The corresponding marginal benefit and marginal cost functions are given by MB(H) = 500 45H and MC(H) = 100 + 30H. What is the best choice of h..

Consumer surplus-producer surplus and deadweight loss : Suppose that the demand curve for wheat is q = 100 - 10p and the supply curve is q = 10p. the government imposes a price support at p = 6 using a deficiency payment program. What is the quantity supplied, the price that clears the market, and the def..

Compre the alternatives using the neua worth method : Jane starts working on her 25th birthday with an annual saary of $55,000. She sets aside 5% of her salary at the end of each year for her pension plan, whch is matched by her employer.

Why does the stock market react to earnings reports : The following type of report occurs each quarter as firms announce their earnings: Weaker-than-expected results last week from Exxon Mobil have set a gloomy backcloth for results on Thursday from Royal Dutch/Shell. The company said its profit margins..

Find magnetic force per unit length between the two wires : Two long parallel wires carry currents of 4 A and 8 A in the opposite direction. The wires are separated by 0.26 m. Find the magnetic force per unit length between the two wires.

Explains the functions and limitations of neural plasticity : Prepare a 1,050- to 1,400-word paper that explains the functions and limitations of neural plasticity in the participant's recovery process

Represent the demand for some service inside the firm : The following demand and marginal cost equations represent the demand for some service inside the firm. At what price should the service be sold? Would it matter whether there was an external market for this service? The demand function P = 30−2Q. Th..

What is the resulting total cost : The manager of Green Chemical Co. has been informed that this year’s production target Q for organic fertilizer (in millions of tonnes) is 20. The manager is asked to allocate the production across the company’s two plants. How should the manager all..

User Account

All Pages