eBay: Post Earnings After Hours Gain Historically Benefits Longs

Apr.27.11 | About: eBay Inc. (EBAY)

eBay (NASDAQ:EBAY) is set to post its Q1 results after the bell tonight, and analysts polled by Thomson Reuters are anticipating a profit of $0.46 per share on revenue of $2.48 billion.

EBAY favors widening with its share performance over the last seven years, crossing more aggressive next-day percentage closing levels following 15 of 28 after-hours earnings events during those years and narrowing in the other quarters.

Looking deeper into the performance data, EBAY has recorded an after-hours gain in 16 of the 28 quarters we've tracked, and it has seen its gain widen in the same direction in next day trade in nine of those events, or 56% of the time.

The stock has declined in night trade over the 12 quarters we've tracked and widened that downside move six times in next-day regular session action, or 50% of the time.

Here's the history:

On Jan. 19, 2011, EBAY advanced 2.7% in after-hours trade after beating Q4 expectations, setting its Q1 outlook in a range that straddled the Street view, and establishing 2011 guidance above estimates. Traders added to that upside the following day, closing the Jan. 20 regular session with a 5.7% advance.

On Oct. 20, 2010, EBAY gained 7.6% in after-hours trade after beating Q3 estimates and setting its Q4 guidance in line to above Street expectations. The stock narrowed its upside the following day, closing the Oct. 21 regular session up 5.9%.

On July 21, 2010, EBAY gained 3.1% in after-hours trade after beating Q2 expectations and setting mixed guidance. It moved higher the following day, closing the July 22 regular session up 3.8%.

On April 21, 2010, the stock fell 8.7% during extended-hours trading after a Q1 beat but Q2 guidance below the Street view. Shares fell a slimmer 5.7% the next day.

On Jan. 20, 2010, the stock was up 8.4% during evening trading after a Q4 beat. Shares rose 8.5% the next day.

On Oct. 21, 2009, the stock fell 4.6% in evening trading after EBAY beat by a penny with Q3 EPS and guided for Q4 in line to below the Street view. The stock fell a slightly slimmer 4.2% the following day.

On July 22, 2009, EBAY gained 4.6% in after-hours trade after beating Q3 expectations and setting its guidance in line with Street estimates. The stock firmed higher the following day, ending the July 23 regular session up 10.6%.

On April 22, 2009, the stock advanced 5.3% after a Q1 beat and Q2 guidance that straddles the Street view. Shares more than doubled that move the next day, closing up 12.3%.

On Jan. 21, 2009, EBAY shed 4.3% in after-hours action after missing revenue expectations and setting guidance below the Street view. The stock went deeper into the red the next day, losing 12.1% by the close on Jan. 22.

On Oct. 15, 2008, EBAY declined 4.5% in evening trade after beating Q3 expectations but also issuing disappointing guidance. The stock narrowed its downside slightly the next day, closing the Oct. 16 regular session down 4.2%.

On July 16, 2008, the stock fell 6.7% during evening trading after the company beat with Q2 results but offered mixed guidance. The loss doubled to 13.8% the next day.

On April 16, 2008, the stock edged up 0.09% in evening trading after the company reported ahead of the Street with Q1 results, sets 2008 guidance above Street, Q2 view in line. Shares ended down 3.4% the next day.

On Jan. 23. 2008, the stock fell 5% during evening trading after EBAY reported ahead of the Street with Q4 but disappointed with guidance. The loss was a slightly deeper 6% the next day.

On Oct. 17, 2007, EBAY climbed a mere 0.4% higher in evening trade after beating Street estimates and guiding higher. That upside was pushed aside the following day, and EBAY lost 6.1% in regular session trade.

On July 18, 2007, EBAY slipped 1.7% in after hours despite beating Q2 estimates and raising its FY EPS outlook to in line to above expectations. Shares trimmed their losses the next day to end the regular session down 1.6%.

On April 18, 2007, EBAY edged up 2.6% after topping Q1 EPS forecasts and issuing guidance that is mostly in line to ahead of expectations. However, shares could not hold those gains and slipped back 3.6% by the end of the next day's regular session.

On Jan. 24, 2007, the stock was up 12.4% in night trade after topping with Q4 results and setting a buyback. The gain was a slimmer 8.1% the next day.

On Oct. 18, 2006, EBAY rose 1.8% in night trade after topping Q3 EPS estimates by two pennies. Shares strengthened further the following day, ending the regular session up 7%.

On July 19, 2006, shares gained 5.2% in the evening session after the company reported in line with EPS, set a buyback, but offered mixed guidance. Shares fell 4.9% the next day.

On April 19, 2006, EBAY dropped 4.6% in after-hours when the company beat Q1 EPS estimates but guided Q2 below Street views. The shares extended their losses the next day, ending the regular session down 8.8%.

On January 18, 2006, EBAY slipped 2.5% in night trade after topping Q4 estimates but guiding for Q1 and FY06 below Street views. The shares, though, recovered the next day and ended regular-hours trading up 5.2%.

On Oct. 19, 2005, EBAY lost 5.5% in after-hours trade after beating on revenue, posting in-line EPS, and guiding for weaker-than-expected earnings. Sellers continued to hit the issue for deeper declines on Oct. 20, sending EBAY down 6.8% by the closing bell.

On July 20, 2005, EBAY rose 14.2% in after-hours trade after reporting Q2 results that beat analysts' expectations and forecasting 2005 earnings above expectations. The stock widened its gains the following day, closing up 20.7% in regular hours trade.

On April 20, 2005 EBAY advanced 0.2% in night trade after beating expectations and guiding mostly in-line. It saw those slim gains disappear on April 21, and the stock slipped a modest 0.09% between the bells.

EBAY was hit for an 11.7% decline the night of Jan. 19, 2005 after the company reported Q4 EPS results a penny shy of expectations and trimmed its outlook. The stock saw more aggressive downside momentum in the Jan. 20 regular session, closing down 19.1%.

EBAY added 3.2% the night of Oct. 20, 2004, after the company beat expectations and guided higher. It soared 9% by the Oct. 21 closing bell.

EBAY shed 5.3% in the July 21, 2004 after-hours session following better-than-expected results but light guidance. It pared its declines in next-day trade, ending bell-to-bell trade up 1%.

Finally, on April 21, EBAY ran 3.2% higher in after-hours trade on bullish results and a strong outlook. The stock jumped 10.4% in the April 22 regular session.

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