Twitter is scheduled for Tuesday, and Facebook rolls out on Wednesday. According to data from Kensho, a financial tool used to quantify market events, both companies have a good earnings track record—beating expectations more than 80 percent of the time. But trading action immediately after earnings is incredibly volatile.
Twitter has rallied as much as 20 percent, and tanked as much as 24 percent after a consensus-beating report.
Facebook shares are also volatile after earnings, rising nearly 30 percent in one instance—but falling only 6 percent on its worst post-earnings-beat day.
Kensho data suggest that the growth trajectory for social media companies may be more important than quarterly income and revenue. As such, the market is more likely to reward Facebook for a better-than-expected quarterly performance than it is Twitter.
Quarterly results for Twitter have beaten consensus five out of six times since it went public in 2013. Yet investors typically sell the first chance they get, pushing shares down 4.6 percent on average.