Sonic Offers Short Prospects Off Earnings-Driven After-Hours Moves

Sonic Corp. (SONC) is set to report its Q3 results in the extended-hours tonight, and analysts polled by Thomson Reuters expect the company to come in with a profit of $0.18 per share on revenue of $151 million.

SONC is mixed in its pattern between the sessions, reversing direction between the after-hours and regular session in 13 of its last 27 earnings events. In the near term, the stock favors widening between the session, adding to its evening move in the same direction the following day in four of the last six quarters.

Looking deeper into its performance data between the sessions, SONC is mixed in finding more aggressive next-day trade when it records an earnings-driven after-hours decline. In 13 quarters where SONC has declined in the after-hours following an earnings announcement, it has added to that downside move in the following day's regular session in seven of those events, or 54% of the time.

On the long side, SONC has recorded 12 events where the stock reacted with a gain in the after-hours following an earnings report. In seven of those events, the stock either cut its evening upside in the following day's regular session or reversed into the red. It widened its gain the following day five times. As a result, longs may want to be wary of betting too heavily in favor of an outsized next-day rise.

There were two other quarters where SONC posted a flat after-hours move followed by either a next-day gain or decline.

On March 22, 2011, SONC gained 1.3% in night trading on the back of better-than-expected Q2 earnings. The stock eked out a wider advance the following day, ending the March 23 regular session up 1.4%.

On Jan. 4, 2011, SONC ended evening trading flat despite beating Q1 estimates. The stock recorded heady gains the next day, closing the Jan. 5 regular session up 11.9%.

On Oct. 19, 2010, SONC gained 4.3% in after-hours trading after meeting Q4 expectations. The stock reversed direction the following day, closing the Oct. 20 regular session down 2.2%.

On June 21, 2010, the stock fell 3% after Q3 results that declined from the year-ago period. Shares dropped 8.3% the next day.

On March 23, 2010, SONC edged down 0.7% in after-hours trading after reporting a loss on lower revenue. It headed deeper in the red the following day, closing the March 24 regular session down 2.6%.

On Jan. 5, 2010, SONC dropped 8.5% in after-hours trading after reporting a year-over-year decline in Q1 results. The stock added to its downside the following day, closing the Jan. 6 regular session down 13%.

On Oct. 20, 2009, SONC ended after-hours trading flat after beating Q4 expectations. The stock turned decidedly negative the following day, closing the Oct. 21 regular session down 10.3%.

On June 23, 2009, the stock gained 4.5% after a Q3 beat. The gain swelled to 11.5% the next day.

On March 23, 2009, the stock recorded a 7.7% gain in evening trading after SONC reported an earnings beat but missed with revenue. Shares fell 1% the next day, however.

On Jan. 7, 2009, SONC declined 7.9% in evening trading after reporting a year-over-year decline in Q1 results. The stock ended the next day's regular session down a narrower 1.7%.

On Oct. 16, 2008, the stock fell 3% after SONC reported earnings in line and revenue above the year-ago quarter. The loss was trimmed to 0.9% the next day.

On June 24, 2008, the stock fell 9.2% during evening trading after a Q3 earnings miss. The loss widened to 10.6% the next day.

On March 24, 2008, the stock fell 1.9% during post-bell evening trading after SONC met with earnings and missed on revenue. The loss widened slightly, to 3.1% the next day.

On Jan. 3, 2008, the stock gained 5% during evening hours after reporting EPS ahead of estimates by a penny. The gain was trimmed to 3.4% the next day.

On Oct. 15, 2007, SONC edged up 0.9% in after-hours trading after beating Q4 expectations. The stock added to its upside in the Oct. 16 regular session, advancing 4.5% by the closing bell.

On June 20, 2007, the stock fell 3.9% in the evening hours after reporting above the Street with Q3 results but guiding lower. The loss fattened to 8.9% the next day.

On March 28, 2007, the stock edged up 0.8% after Q2 results topped the Street. The gain was a slim 0.1% by the close of regular trading the next day.

On Jan. 3, 2007, the stock fell 1.5% in the after-hours session after the company reported revenue in line and EPS just shy, while guiding in line to just higher. Shares were down 5.3% the next day.

On Oct. 16, 2006, SONC declined 1.9% in after-hours trading after the company missed on revenue and issued guidance that could come in shy of expectations. The downside extended the next day, closing out the Oct. 17 regular session off 5.4%.

On June 20, 2006, SONC shares eased 2.1% in after-hours when the company beat Q3 earnings estimates by a penny per share but missed on sales. The shares managed to recover some losses, though, the next day. It ended the regular session down 1.1%.

On March 20, 2006, shares slipped 0.09% in the evening hours after the company reported ahead of the Street with its latest earnings but disappointed some on the Street with guidance that only in line with analyst expectations. The stock rebounded to gain 1.2% the next day.

On January 4, 2006, SONC edged up 0.4% in evening trading after it reported Q1 earnings in line with expectations but it just missed sales estimates. It also predicted Q2 sales growth beneath the FC mean. Shares came under pressure the next day, ending the regular session down 4.7%.

On Oct. 12, 2005 SONC slipped 1.2% in light after-hours trading after the company matched EPS expectations, came in light on revenue, and guided in-line. The downside was cut back a bit in the Oct. 13 regular session, where SONC ended the day down 0.6%.

On June 27, 2005 SONC edged up 0.7% in evening trading after the company matched estimates and guided in-line. That modest gain failed to hold between the bells on June 28, and SONC lost 3.9% by the regular session close.

On March 22, 2005 SONC advanced 1.7% in evening action after the company posted in-line EPS and beat on revenue. It saw those gains evaporate on March 23 as the stock closed bell-to-bell trade down 1.4%.

On Jan. 3, 2005 SONC gained 1% in after-hours trading after the company topped estimates and set its earnings outlook slightly below expectations. Buyers continued to bid the shares higher on Jan. 4, boosting the stock 6% by the close of that day's trade.

On Oct. 12, 2004 SONC advanced 4.6% in evening play after beating Street estimates and guiding higher. In the Oct. 13 regular session it saw a modest improvement over its evening trade, rising 4.8% by the close.

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