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How Facebook Shares Typically Trade Following Q3 Earnings

Wayne Duggan

Facebook, Inc. (NASDAQ: FB) is reporting its third-quarter earnings after Wednesday's close.

Benzinga took a look back at Facebook’s other seven third-quarter earnings reports to look for any potential patterns in how the stock reacts.

  • Q3 2018: shares up 3.8% the first day following the report
  • Q3 2017: down 2%.
  • Q3 2016: down 5.6%
  • Q3 2015: down 4.6%
  • Q3 2014: down 6%
  • Q3 2013: up 2.4%
  • Q3 2012: up 19.1%

Most initial third-quarter earnings reactions have been relatively large, and many of Facebook’s most volatile trading sessions of the past eight years have happened within two days of an earnings release.

The charts below show Facebook’s largest single-day gains and losses of the past eight years. The dates highlighted by the red boxes indicate trading sessions that occurred within two days of a quarterly earnings report.

Here are some potential takeaways from the information outlined above:

  • Facebook tends to have volatile earnings reactions, and one of its two largest single-day gains in history came in response to third-quarter earnings.
  • Facebook's stock has typically moved up or down more than 2% on the day following third-quarter earnings.
  • Three of Facebook’s last four earnings reports have generated a positive market reaction, and the lone exception was a modest 1.9% post-earnings sell-off last quarter.

According to Optionslam.com, Facebook’s seven-day implied movement based on the weekly options market is 6.4%.

Benzinga’s Take

Expectations appear relatively low for Facebook heading into earnings given the stock is down 2.7% overall in the past three months. Facebook hasn’t generated back-to-back negative earnings reactions since the first quarter of 2017.

Facebook's stock traded around $187.14 per share at time of publication.

Do you agree with this take? Email feedback@benzinga.com with your thoughts.

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