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I just got an email telling me about a company's 2013 profit. The first sentence is very short, but it is hard to understand for me.

XXXX(company name) misses by $0.05(per share), beats on revenue.

My understanding is the company XXXX lost 0.05 per share last year, but revenues got higher. or, the company XXXX lost another figure per share (say 0.10), and lower than market expectation(estimate value 0.05).

which one is correct under this context? what is the correct meaning of the word "miss" here?

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  • I'm not a finance expert, but perhaps they mean they underperformed against their target share price - i.e. they were hoping to get to share price $5.00, but instead only got to $4.95 - "missed by that much" – Jeffrey Kemp Feb 19 '14 at 2:59
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    The company fell short of projected earnings by five cents per share, but exceeded projected revenue. – StoneyB on hiatus Feb 19 '14 at 3:17
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These are both most likely stated with respect to the average/consensus of figures previously put forth by analysts following the stock. There is some small chance that it is in reference to the company's own projection of its earnings/revenue, but that would typically be clarified in the same sentence or paragraph.

Many financial institutions have analysts that follow and continuously evaluate publicly traded companies, and for larger companies (Fortune 500 size) may have dozens or more analysts following them. Each quarter, each of those analysts publish a projection of what they think the earnings are going to be. When the actual earnings report is released, the stock price usually goes up or down significantly if the actual earnings are greater or lesser than the consensus (i.e., average) of the analysts' projections.

So I would interpret the quote you have as most likely meaning that, for example, the analyst consensus was $0.15 per share and the actual earnings was $0.10 per share, but the company's actual revenues are growing faster than the analysts expected. It's not that the company lost money, they just didn't make as much as the analysts/market were expecting.

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