Express Scripts Earnings History Favors Longs, Shorts Should be Wary

Express Scripts (ESRX) has a strong history of adding to its earnings-driven after-hours gains in the following day's regular session - a datapoint that may reward longs if the stock should move higher in the wake of the company's Q1 report tonight. Shorts, however, should be skeptical of any downside move this evening as the stock often sees its earnings-driven after-hours declines narrow or reverse direction in the following day's regular session.

More broadly, ESRX has tended to widen moves between the sessions, doing so in 15 of the last 26 earnings releases we've tracked. The near-term performance favors reversals, narrowing or reversing direction in the last four consecutive quarters - all of which started as earnings-driven after-hours declines.

Looking deeper into the data, shorts will note that the stock has declined in response to earnings news 13 times, but has extended that move only five times.

As for the 13 post-earnings evening advances, more aggressive same-direction moves have been seen 10 times.

ESRX is expected to report a Q1 profit of $0.69 per share on revenue of $11.55 billion, according to Thomson Reuters.

Here's the historical performance data:

On Feb. 16, 2011, ESRX declined 1.6% in after-hours trading after beating Q4 EPS estimates by a penny and setting its guidance in a range that straddled the Street view. The stock trimmed its downside the following day, closing the Feb. 17 regular session off 1.1%.

On Oct. 27, 2010, the stock fell 1.5% after the company just beats with Q3 earnings but misses with revenue. The company did boost guidance. Shares dropped a slightly slimmer 1.2% the next day.

On July 28, 2010, ESRX shed 3.4% in evening trading after beating earnings estimates, meeting on revenue and boosting its EPS guidance range. The stock reversed direction the following day, closing up 5.8%.

On April 28, 2010, ESRX declined 2.8% in after-hours trading after reporting mostly in-line results and guidance. The stock reversed direction the following day, closing the April 29 regular session up 1.1%.

On Feb. 24, 2010, ESRX leaped 8.2% in after-hours trading on the back of better-than-expected results and guidance. It added modestly to its upside the following day, rising 8.5% by the Feb. 25 close.

On Oct. 28, 2009, ESRX edged up 0.4% after beating Q3 expectations and raising guidance. The stock continued moving higher the following day, ending the Oct. 29 regular session up 5.3%.

On July 29, 2009, the stock gained 2.7% after an earnings beat and raised guidance. The gain was trimmed to a tiny 0.1% the next day.

On April 29, 2009, the stock gained 1.3% after a Q1 beat and raised guidance. The gain expanded to 5.8% the next day.

On Feb. 25, 2009, the stock fell 1.6% after a revenue beat and reaffirming 2009 EPS guidance. Shares tumbled 8.1% the next day.

On Oct. 30, 2008, ESRX advanced 4.2% in after-hours trading after topping expectations and setting guidance in-line to above estimates. It gained a more aggressive 5.2% the following day.

On July 30, 2008, the stock rose 3% after ESRX beat with Q2 results and raised its FY EPS view to above Street. The gain nearly doubled to 5.9% the next day.

On April 29, 2008, shares declined 3.5% in evening trading on a revenue miss. The loss was trimmed to 2% the next day.

On Feb. 21, 2008, the stock eased 0.4% during evening trading after showing early gains when EPS beat the Street view. Shares rebounded to gain 2.4% the next day.

On Oct. 24, 2007, the stock gained 2.8% during evening trading after ESRX beat with Q3 earnings and raised guidance. The gain strengthened to 6.2% the next day.

On July 25, 2007, ESRX eased 1.4% in night trading despite topping Q2 EPS estimates and meeting on sales. It also guided for FY EPS to beat Street forecasts. Shares fell even further the next day, ending the regular session down 3.9%.

On April 23, 2007, ESRX gained 4.5% in the extended-hours session after reporting ahead of the Street with Q1 results and guiding higher. The gain was a robust 9% the next day.

On Feb. 8, 2007 ESRX inched up 1.7% in the pre-market session after reporting Q4 sales that miss expectations but beating on earnings. It also offered FY and Q1 EPS guidance above Street views. However, shares lost some strength and ended the regular session up only 0.7%.

On October 24, 2006, ESRX fell 2.4% in night trading after it missed Q3 sales estimates and beat EPS expectations. Shares dropped further the next day, closing the regular session down 8.6%.

On July 26, 2006, shares were up 3% in the evening session after the company reported ahead of the Street with Q2 results and offered upbeat guidance. The gain was a slightly smaller 2.9% the next day.

On April 26, 2006, ESRX declined 3.6% in after-hours trading after the company matched Q1 expectations and guided its full year view to mostly match the Street. The downside picked up momentum in the April 27 regular session, with ESRX closing down 9.2%.

On Feb. 22, 2006, ESRX declined 2.9% in after-hours trading after the company beat for its Q4. The stock continued its downside run on Feb. 23, ending that day's regular session off a more vigorous 5.6%.

On Oct. 26, 2005, shares of ESRX were up 7.9% in night trading after reporting Q3 net income of $0.68 per diluted share, above the First Call consensus estimate of $0.61. That came on revenue of $3.8 billion, below the FC mean of $3.986 billion. The company also guided higher for full-year 2005 results. The stock was up 16.6% the next day.

On July 27, 2005, ESRX gained 5.9% after topping Q2 estimates and guiding 2005 above Street estimates. The shares widened their gains the next day, ending regular session trade up 7.3%.

On April 26, 2005, ESRX fell 1.1% despite beating the First Call EPS target by 4 cents and guiding 2005 ahead of estimates. It reversed direction in the April 27 regular session, gaining 5.5%.

On March 2, 2005, ESRX rose 2.7% after Q4 EPS beat the Street target by 1 cent and the company guided Q1 above the Street. Traders goosed the stock in the March 3 regular session, and it jumped 9.4%.

On Nov. 3, 2004, ESRX eased 0.5% after reporting in-line revenue and Q3 EPS that beat the Street by 2 cents. It bounced back in the Nov. 4 regular session, closing up 4.1%.

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