Question

XYZ stock announced record earnings this morning for their last fiscal year, but the stock is down 4.8% today. Please explain how this may be possible.

Answer 1

The investors in the market would have expected higher increase in earnings before the earnings of company were declared and thus the price of stock would have already been increased earlier. However later when the increase in earnings were not as expected by investors the price of stock would have fallen down as it did not meet investors expectation. One of the possibility of decrease in stock price would be higher expected increase in earnings based on the industry performance for the company which was not met.