Earnings guidance moves the stock overnight, not after the open
Most companies release earnings outside market hours, and file the 8-K the same day. So when does the price actually react to what the release says about the outlook? We measured it on our own labels.
What did we measure?
3,939 earnings filings from 330 companies, July 2022 to August 2026, released before the open or after the close. Each was labelled from the release itself: did the company raise its outlook, cut it, keep it, start one, or not mention it. Each move is measured against the median of the other companies over the same instants, and each company counts once, so no single name drives a result. The move is split in two: the overnight gap, from the last close to the next open, and the session that follows.
| Outlook in the release | Companies | Overnight gap vs peers | From the open, same day |
|---|---|---|---|
| Raised | 179 | +1.37% | +0.09% |
| Lowered | 105 | −2.86% | −0.02% |
| Kept | 179 | −0.31% | +0.05% |
| Not mentioned | 144 | −0.19% | −0.01% |
Raised outlooks gapped up in 134 of 179 companies; cuts gapped down in 83 of 105. Neither split is plausibly chance. From the open onward, the median company moved about nothing, and the same holds a week out.
What does that mean?
The market prices the outlook before the first trade of the next session. A cut costs roughly twice what a raise earns. And the 8-K does what it should: it confirms what the release already said. That fits research showing that prices move on SEC filings within seconds of the first readers receiving them.
The point: for event data, the time stamp is half the value. A label that cannot say when the information became public cannot say what it was worth.
- Rogers, Skinner and Zechman, "Run EDGAR Run: SEC Dissemination in a High-Frequency World", Journal of Accounting Research (2017): summary.