Apple Shares Not A Long Favorite After Earnings Reports

Oct.18.11 | About: Apple Inc. (AAPL)

Apple (NASDAQ:AAPL) is generally not a stock that rewards longs in the immediate wake of the company's quarterly results. In fact, longs have often seen their earnings-driven after hours gains get cut back the next day while shorts have managed to catch a modest trend of adding to evening declines in follow-on regular session play.

In other words, shorts historically catch the better trade off AAPL's results in tonight's after hours while longs have in the past watched their evening gains slim down by the next day's closing bell.

AAPL has recorded an earnings-driven after hours gain in 23 of the 32 quarters tracked in our database. The stock added to its after hours upside in next-day action nine times, reversed direction 13 times, and once remained even with its after hours move. On the downside, AAPL has recorded nine earnings-driven after hours declines - adding to its negative trade five times in next-day action, and reversing direction four times.

AAPL is due with its Q4 results in tonight's after hours trade, and analysts expect the company to report a profit of $7.39 per share on revenue of $29.68 billion, according to Thomson Reuters.

Here's the historical data:

On July 19, 2011, AAPL gained 5.2% in night trading after beating Q3 estimates but also issuing a Q4 outlook below estimates. The stock saw a good portion of its gains evaporate the next day, closing the July 20 regular session up 2.6%.

On April 20, 2011, AAPL advanced 4% in after hours trading after beating Q2 estimates but issuing a Q3 view below Street expectations. The stock lost some of its upside the following day, closing the April 21 regular session up 2.4%.

On Jan. 18, 2011, AAPL edged up 1% in night trading after blowing past Q1 estimates and setting its Q2 guidance above the Street view. The stock lost its upside the following day, ending the Jan. 19 regular session off 0.5%.

On Oct. 18, 2010, AAPL declined 5.6% in evening trading after beating Q4 expectations and setting mixed Q1 guidance. The stock cut its downside the following day, closing the Oct. 19 regular session off 2.6%.

On July 20, 2010, AAPL gained 2% in after hours trading after blowing past Q3 estimates and setting mixed Q4 guidance. The stock narrowed its upside the following day, closing the July 21 regular session up 0.9%.

On April 20, 2010, the stock gained 5.6% after easily beating with Q2 results but setting mixed guidance. Shares rose a slightly stronger 5.9% during the following day's regular session.

On Jan. 25, 2010, AAPL edged up 0.9% in after hours trading after easily beating Q1 expectations and setting its guidance above Street estimates. The stock added to its upside the following day, rising 1.4% by the Jan. 26 close.

On Oct. 19, 2009, AAPL leaped 6.1% in evening trading after topping Q4 expectations and issuing mixed guidance that included an earnings view below Street estimates. The stock cut its upside the following day, ending up 4.7% in the Oct. 20 regular session.

On July 21, 2009, the stock gained 4.6% after a Q3 beat but issued Q4 guidance that was below the Street view. Shares gained 3.4% the next day.

On April 22, 2009, the stock gained 2.3% after reporting a Q2 beat but guiding largely below the Street view for Q3. Shares were up 3.2% the next day.

On Jan. 21, 2009, AAPL advanced 8.9% in after hours trading after reporting better-than-expected results but also issuing guidance shy of Street estimates. It lost some of its gain the next day, closing the Jan. 22 regular session up 6.6%.

On Oct. 21, 2008, AAPL advanced 12.3% in night trading after coming in shy on Q4 revenue, beating on earnings, and setting guidance below expectations. It lost a good portion of that gain the next day, closing the Oct. 22 regular session up a more modest 5.8%.

On July 21, 2008, AAPL tumbled 11.1% in after hours trading after beating Q3 expectations but also issuing Q4 guidance below Street estimates. It saw the bulk of that downside cut back the next day, with the stock closing down a more modest 2.5% in the July 22 regular session.

On April 23, 2008, AAPL declined 0.5% in after hours trading after topping Q2 expectations but offering mixed guidance. The stock rebounded to end the April 24 regular session up 3.7%.

On Jan. 22, 2008, AAPL declined 11.4% in after hours trading after beating on Q1 but also setting Q2 guidance below the analyst consensus. The stock cut its downside slightly on Jan. 23, ending the regular session down 10.6%.

On Oct. 22, 2007, the stock gained 6.8% in the after hours session after the company reported ahead with Q4 results and guides to beat. AAPL gained 6.7% the next day.

On July 25, 2007, AAPL gained 7.6% in night trading after topping Q3 expectations and issuing Q4 guidance below Street estimates. Shares trimmed those gains the next day, ending the regular session up 6.4%.

On April 25, 2007, AAPL firmed 6.5% in evening action after posting a sharp year-over-year increase in results and setting guidance that was about in line with the Street view. The stock lost a chunk of its gain the next day, ending up 3.6%.

On Jan. 17, AAPL lost 1.1% in after hours trading after the company posted a year-over-year increase in results but also issued guidance below expectations. The declines expanded to a 6.1% slide by the close of the regular session.

On Oct. 18, 2006, AAPL rose 4.4% in after hours trading when the company beat Q4 expectations. Although the company forecast Q1 below Street views, investors focused on the strong Q4 and took shares higher the next day. AAPL closed the regular session up 5.9%.

On July 19, 2006, the stock jumped 8.3% in the evening hours after the company handily topped Q3 estimates, guidance was mixed. The gain improved to 11.8% the next day.

On April 19, 2006 AAPL gained 4.2% in evening activity after the company beat Q2 EPS estimates although sales came in short. It also guided for Q3 to be in line to below estimates. The shares gave back some gains the next day, ending the regular session up 3%.

On January 18, 2006, AAPL slipped 3% in night trade after beating Q1 expectations but setting Q2 forecasts below Street views. The shares fell further the next day, ending the regular session down 4.1%.

On Oct. 11, 2005, AAPL tumbled 9.8% in after hours session after the company missed revenue expectations. It narrowed its downside on Oct. 12, losing a less aggressive 4.5% in the regular session.

On July 13, 2005, AAPL gained 3.5% after hours after Q3 results topped Street targets and the company guided Q4 in line. It widened its gain in the July 14 regular session, climbing 6.2% by the close.

On April 13, 2005, AAPL dropped 1% after hours after the company topped estimates and guided higher. It fell further in the April 14 regular session, ending down 9.2%.

On Jan. 12, 2005, AAPL jumped 11.5% after hours after the company's earnings far exceeded expectations and it guided above Street estimates. It cut those gains in the Jan. 13 regular session, ending up 6.6%.

AAPL shares leaped 6.5% the night of Oct. 13, 2004, after the company blew past Street expectations and set guidance well ahead of estimates. The stock soared higher in next-day trade, ending the Oct. 14 regular session up 13.1%.

On July 14, 2004, AAPL reported better-than-expected results and the stock ramped up 7.1% in that night's after hours. It closed the following day's regular session up a healthy 11.3%.

On April 14, 2004, AAPL jumped 9.9% on better-than-expected results and ended the next day up 9.9%.

In the following three events AAPL topped Street expectations each evening.

The stock slipped 4.9% the night of Jan. 14, 2004 and declined 5.5% by the following day's close.

Back on Oct. 15, 2003, AAPL ended the evening session off 4.8%. It added to its declines the next day, declining 6.3%.

On July 16 of 2003, AAPL rose a modest 1.4%, but followed that gain with a 5.2% rise the next day.

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