Definition of Missed Earnings

What does it mean if a company "misses earnings"? What is meant by the term "missed earnings"?

Companies will usually provide guidance going forward as to what kind of revenues and earnings they are expecting to post in future quarters.

For instance, a company, during their Q4 earnings report, may release guidance for the first quarter. They may predict that earnings will be $0.50 per share and revenues will be $475 million for the quarter.

From this guidance and their own research, analysts will then come up with their own expectations. Analyst expectations for a particular quarter are averaged out, and from that the "consensus analyst estimate" is born.

If a company reports earnings and their final numbers end up falling short of the consensus analyst estimate, then they have missed their earnings number. This will usually result in weakness in the stock and analyst downgrades.

The opposite of "missed earnings"? "Beating the number."

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