EMC Maintains Post-Earnings Pattern Favorable to Longs

Jul.19.11 | About: EMC Corporation (EMC)

EMC Corp. (NYSE:EMC) is a stock for longs to keep close tabs on. When the stock gains in the wake of quarterly earnings news, it tends to add to that upside move during regular trading about 57% of the time. Post-earnings declines, on the other hand, are rarely extended during regular trading. In the very near term, the stock has tended to turn negative pre-market performances into regular-session gains.

In looking back at EMC's performance between the sessions following extended-hours earnings events we've found the issue is mixed. The stock has seen more robust follow-on action in 12 of its last 25 quarterly reports. In the near-term, the stock has put up two reversal moves and two same-direction more aggressive moves in the last four quarters.

Looking deeper into the data, EMC has followed earnings news with a gain 14 times, extending that move eight times, or 57% of the time. The stock has followed earnings news with a decline 11 times, but added to that move just four times.

EMC Corp. (EMC) is due to report its Q2 results in the pre-market on Wednesday, July 20, and analysts polled by Thomson Reuters expect the company to post a mean profit of $0.34 per share on revenue of $4.7 billion.

On April 19, 2011, the stock gained 1.4% after meeting with earnings, beating with revenue and offering mixed guidance. Shares rose a stronger 4.6% during regular trading later that day.

On Jan. 25, 2011, the stock fell 1.3% after an earnings and guidance beat. Shares rebounded to gain 2.3% the next day.

On Oct. 19, 2010, EMC declined 0.7% in pre-bell trading after beating Q3 revenue estimates, meeting on EPS, and setting its 2010 guidance above the Street view. The stock reversed direction in that day's regular session, ending up 0.1%.

On July 21, 2010, EMC shed 2.4% in pre-market action despite beating Q2 estimates and setting its outlook to exceed its prior guidance. The stock added modestly to its losses in that day's regular session, ending down 3.7%.

On April 21, 2010, the stock gained 2.3% after a Q1 beat and full-year guidance above the Street view. Shares rose a nearly comparable 2.2% the next day.

In the Jan. 26, 2010, pre-market, the stock gained 3.3% after a Q4 beat and guidance above the Street view. Shares were up 3.9% during regular trading.

On Oct. 22, 2009, EMC slipped 0.6% in pre-bell action despite reporting better-than-expected results and guidance. The stock added slightly to its downside in that day's regular session, ending down 1%.

On July 23, 2009, EMC gained 5.1% after a Q2 earnings and guidance beat. The gain was trimmed to 4% the next day.

On April 23, 2009, EMC declined 3.2% in pre-bell action after missing revenue expectations and meeting on earnings. The stock shed a fatter 4.1% in the follow-on regular session.

On Jan. 27, 2009, the stock fell 3.5% during pre-market trading despite a beat, and the company couldn't guide for Q1. The stock fell 2.5% in that day's regular session.

On Oct. 22, 2008 EMC gained 5.8% in pre-market trading after meeting on revenue and beating on earnings. It saw that gain narrow the following regular session, ending the day up 3%.

On July 23, 2008, EMC advanced 2.9% in pre-market trading after topping Q2 expectations. The stock soared higher in that day's regular session, advancing 13.7% by the closing bell.

On April 23, 2008, EMC gained 5.2% in pre-bell action after beating on revenue and posting earnings in line with expectations. It lost much of that gain in the following regular session, ending up a more modest 1.9%.

On Jan. 29, 2008, EMC declined 8.9% in pre-market trading after topping Q4 expectations and setting its full year earnings view above the Street consensus. The declined was cut back just a bit in the following regular session, ending Jan. 29 down 6%.

On Oct. 25, 2007, EMC advanced 6.4% in pre-market trading after posting results up over year ago levels. It added to its gains in the following regular session, closing the day up 8.5%.

On July 24, 2007, EMC declined 1.5% in pre-market trading after beating Q2 estimates and issuing mixed guidance. The stock added to its downside in the following regular session, losing 2.3% by the closing bell.

On April 17, 2007, EMC gained 4% in pre-market trading after beating Street estimates. It scaled back that morning upside in the regular session, gaining 3.1% by the closing bell.

On January 23, 2007, EMC edged up 1.8% in the pre-market session after beating Q4 and FY estimates and forecasting FY07 sales above Street views. However, shares could not hold all their gains and ended the day session only up 0.6%.

On Oct. 17, EMC shed 1.8% in pre-bell trading after the company beat Q3 estimates but also announced expectations of taking a Q4 charge. The downside narrowed slightly to a 1% decline in the regular session.

On July 14, 2006, EMC shares declined 2% in pre-market trading after the company's Q2 revenue miss, better-than-expected EPS, and guidance for Q3 and the full year that was mostly in line with expectations. It narrowed that downside slightly in the regular session, ending the day down 1.5%.

A brief look at the longer-term historical performance data follows:

4/20/06 Pre-Market: +3.1%; 4/20/06 Regular Session: +3.9%

1/24/06 Pre-Market: +2.1%; 1/20/06 Regular Session: +2.9%

10/19/05 Pre-Market: +1.8%; 10/19/05 Regular Session: +3.9%

7/21/05 Pre-Market: -3.6%; 7/21/05 Regular Session: -2.2%

4/19/05 Pre-Market: +6.3%; 4/20/05 Regular Session: +13.2%

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