Definition of Blowout Quarter
What is the definition of the term "blowout quarter"? What is meant by the term "blowout quarter"?
A "blowout quarter" occurs when a company significantly outperforms earnings expectations.
Publicly traded companies are required to post earnings numbers every three months (or "quarter"). Companies will give estimates for future revenue and earnings growth, and analysts who are following the company will come up with projections for future earnings based on information from the company and their own calculations.
If a publicly traded company significantly beats analyst projections, they are said to have posted a "blowout quarter".
Let's look at an example.
XYZ, Inc. is expected to post earnings of 50 cents per share on revenues of $8.4 billion for their fourth quarter. This is the average estimate of the nine analysts who are currently following the company.
Thanks to stronger than anticipated sales of their main product, XYZ, Inc. posts earnings of 71 cents per share on revenues of $9.1 billion. In addition, XYZ, Inc. significantly increases their estimates for earnings growth going forward.
This would qualify as a "blowout quarter" and would very likely result in the stock significantly increasing in value over the short term.
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