This bad press release just makes this stock that much riskier to own, insiders, institutions and average joe holders will be selling next week and all into the new year. Stock was overbought and overpriced to begin with.
A company sells an energy drink or something and sales have been going through the roof, with a quarter ended September 30th.
But on October 1st a report comes out saying that the soda KILLS people, well, come their earnings report, of course it's going to show that they had good earnings thru the end of the quarter.
But what happens when they report their quarter for the period ending December 31st? Oops, no more sales.
Stocks trade on future earnings, not past earnings. And until we see how much this will cost the company (are nearly all the units "bad?" are they on the hook to pay for all the surgeries? How much does insurance cover), you can't rely on hindsight earnings. Someone already posted a good list of questions that need to be answered. I'll be taking the company's view with a grain of salt (you think they're going to be really negative?) and try to balance it with notes from analysts and response from doctors if that can even be measured.
Well of course earnings will be good on thursday! it will be the same trend from the last quarter, duh.
The news on Friday will impact FUTURE earnings. All the sales reported on Thursday are in the books. It's the next quarter (particularly the one after) that you'll see the impact of the news. Doctors may shy away from their products and take a wait and see approach.
We won't know the extent of the damage until next year. Let's see how rosy of a picture the company paints tomorrow morning.
But for those of you saying "Earnings will be great," get a clue. The earnings report is no longer relevant.