whisper number


Whisper Number or Forecast

An informal forecast of a publicly-traded company's earnings per share. One arrives at the whisper number by a combination of past performance, perceived optimism by company officials, and just plain rumor. The whisper number can be useful, as it is occasionally more accurate than official forecasts. However, the Sarbanes-Oxley Act restricts the availability of some information that previously contributed to the whisper number, making it more difficult for some investors to determine. See also: Price out.

whisper number

An unofficial estimate of a financial variable (generally, earnings or revenues) that will be reported by a corporation. A whisper number may be different from published estimates by financial analysts or earnings guidance provided by corporate management.Case Study Whisper numbers frequently proved a major factor in moving stock prices during the stock market boom of the late 1990s. A corporate earnings announcement that met consensus estimates by analysts but fell short of the whisper number often resulted in a major price decline in the price of the firm's stock. Likewise, an earnings announcement that exceeded the whisper number could push a stock price higher. Whisper numbers often originated in Internet chat rooms, where individual investors shared rumored information with fellow investors. These rumors were occasionally believed to have corporate insiders as a source. In particular, investors were searching for companies that were likely to report earnings that were higher or lower than expected by Wall Street analysts. Whisper numbers lost their clout following the 2001 implementation of Regulation Fair Disclose, which prohibited companies from making selective disclosures.

Whisper number.

A whisper number is an unofficial earnings estimate for a particular company that a stock analyst shares with clients to supplement the official published estimate.

If the company reports earnings in line with the official estimate when the whisper number has been higher, the stock price may fall anyway since investors were expecting something better.

The same is true in reverse. If earnings fall short of official expectations but meet a lower whisper number, the stock price may go up.