3 Earnings Reports Worth Watching After Thursday's Close

Includes: DMAN, KKD, SCEIQ
by: SA Editor Rocco Pendola

As far as the massive players go, earnings season kicks back into full force next month. Alcoa (NYSE:AA), for instance, reports on April 11th. Big and small names continue to report, however, with several reports coming in on Thursday that could prove interesting. I look at three of the companies who update investors this afternoon after the closing bell.

Krispy Kreme Doughnuts (KKD). When I moved to Santa Monica, I was somewhat surprised to see a Krispy Kreme location within walking distance of my house. I, like many investors, considered the purveyor of fine junk foods relegated to random locations in far-flung suburban outposts. But, it was not so; Krispy Kreme still hunkered down on some of Wilshire Boulevard's most expensive land.

The fall of KKD has been well-chronicled. During the year 2000, KKD shares traded at premium of over $100. Shortly after a couple of 2-for-1 splits, KKD went on a slow and steady descent, flirting with the $1.00-level throughout early 2009. Over the last 52 weeks, however, Krispy Kreme has seen its shares rebound to a high of $8.16. KKD closed Wednesday's session at $6.83.

KKD still trades at somewhat of a premium, with a P/E ratio of close to 50. According to Yahoo! Finance, the three analysts who cover the stock expect earnings of $0.04 per share and considerable EPS growth throughout 2011. Short interest in KKD is not huge -- about 3 million shares or 5% or so of the float. But if KKD beats earnings, don't be surprised to see it run aided by a short squeeze.

Sino Clean Energy (SCEI). As a hockey fan, I love the old saying, "I went to see a fight and a hockey game broke out." The stock market should adopt a snappy new line: "I dialed into an earnings call and a Chinese fraud broke out." I doubt Sino is up to anything nefarious, but it sure has taken investors on a wild ride over the last 52 weeks, trading as low as $2.00 and as high as $10.10. It closed the day Wednesday at $5.66. SCEI has shed about $1.50 since mid-February.

Recent and potential future shareholder dilution certainly played a key role in the recent sell-off. Undoubtedly, investors will want answers about what Sino plans to do with the cash they have raised and the specific intent of a recent offering that is to bring in more than $7 million. Sino produces and distributes coal-water slurry fuel, which the Chinese government supports as a "clean coal" technology.

DemandTec (NASDAQ:DMAN). Investors have bid up the shares of DemandTec in recent weeks, possibly counting on a rebound in retail to accelerate revenues and earnings growth. The San Mateo, California-based company provides pricing and promotional solutions to retailers across North America, South America, and Europe. DemandTec customers include Best Buy (NYSE:BBY), Home Depot (NYSE:HD), Target (NYSE:TGT), Walmart (NYSE:WMT) and Safeway (NYSE:SWY).

Despite a long and impressive slate of customers, DemandTec is not profitable. Throughout 2011, several insiders have been selling off DMAN shares between $12.06 to $14.04, and with some frequency. As of its last quarterly report, filed at the SEC's Edgar Online website, the company reported having about $69 million in cash versus debt of just $8,000. These numbers come before DemandTec's recent acquistion of analytics software firm MFactor. One red flag investors will probably keep an eye on during the report: Accounts receivable spiked between the end of August and the end of November last year, from $12.8M to $17.4M. While revenues also grew, the pace was not quite as strong.

DMAN shares have enjoyed a nice run of late, more than doubling over the last year. Thursday afternoon's earnings report could provide further momentum or trigger a significant tumble.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.