what is the effect on the stock price of a company that announces it earned higher-than-expected quarterly profits? the stock price will likely go down because analysts do not like unexpected surprises from company financial reporting. the stock price will likely go up because the announcement suggests that the company is undervalued. the stock price will likely go up because it's a clear indication that the financial health of the company is strong. the effect depends on what generated the profits and how analysts forecast this information.