Electronic Arts' Post-Earnings Pattern Brings Something For Longs And Shorts

| About: Electronic Arts (EA)

Electronic Arts (ERTS) is set to report its Q2 results after the bell tonight, and analysts polled by Thomson Reuters are anticipating a loss of $0.04 per share on revenue of $966 million.

ERTS favors widening between the sessions following after-hours earnings events. It has widened its share move the following day in 20 examples, cut back or reversed its share move nine times, and once matched its evening decline the following day. Near term, it reversed in the most recent quarter, snapping a streak of a wider share move in 12 straight quarters.

Looking deeper into the data, ERTS has declined in 16 of the 29 quarters we've tracked. The stock has built on that move 11 times the next day, or 64% of the time.

ERTS has gained over 14 quarters of earnings, adding to that move nine times, or 69% of the time.

On July 26, 2011, the stock rose 1.6% after a Q1 earnings beat. Shares fell 3.5% the next day.

On May 4, 2011, ERTS advanced 2.4% in after-hours trading after beating Q4 expectations and issuing mixed guidance. The stock rolled higher the following day, closing the May 5 regular session up 8.8%.

On Feb. 1, 2011, the stock jumped 9.1% in evening trading after an earnings beat and guidance that straddled the Street view. Shares gained 15.8% the next day.

On Nov. 2, 2010, the stock fell 1.3% after ERTS reported an unexpected profit but missed with revenue and guidance. Shares dropped a deeper 4.3% the next day.

On August 3, 2010, the stock gained 5% during evening trading after a Q1 earnings beat. Shares rose a stronger 7.4% the next day.

On May 11, 2010, the stock fell 4.1% during extended-hours trading after an earnings beat but guidance below the Street view. Shares fell a deeper 5.8% the next day.

On Feb. 8, 2010, ERTS declined 8.5% in after-hours trading after setting its guidance below expectations. The stock edged further south the following day, closing the Feb. 9 regular session down 8.7%.

On Nov. 9, 2009, the stock fell 1.4% after issing mixed Q2 results and guiding in line. Shares fell 6.3% the next day.

On Aug. 4, 2009, ERTS slipped 0.2% in after-hours trading after reporting a smaller-than-expected loss and backing its fiscal year earnings view. The stock continued heading lower the following day, ending down 6.8%.

On May 5, 2009, shares fell 3.8% even after the company beat with Q4 results and guided above the Street for FY10. The stock fell 4.9% the next day.

On Feb. 3, 2009, the stock gained 5.6% after initially falling when reporting a Q3 loss and guiding for a full-year loss. Shares jumped 11.4% the next day.

On Oct. 30, 2008, ERTS tumbled 13.9% in after-hours trading after issuing a mixed outlook. It plummeted lower the next day, closing the Oct. 31 regular session down 17.8%.

On July 29, 2008, the company fell 3% after reporting a slimmer loss than the year-ago period but guidance in line to below the Street view. The stock fell 6.6% the next day.

On May 13, 2008, the stock fell 3.2% during evening trading despite a Q4 earnings beat. The stock also fell 3.2% the next day.

On Jan. 31, 2008, the stock fell 2.9% during evening trading after ERTS reported Q3 EPS in line though revenue missed and guidance was mixed. The stock rebounded to gain 2.6% the next day.

Nov. 1, 2007, the stock gained 5% during evening trading after the company reported ahead of the Street with results. The gain was trimmed to 2.9% the next day.

On Aug. 1, 2007, the stock edged up 0.2% in evening trading after a beat but mixed guidance. The gain swelled to 7.2% the next day.

On May 8, 2007, ERTS slipped 2.6% in evening trading despite beating Q4 expectations. Shares fell further the next day and ended the regular session down 4.3%.

On Feb. 1, 2007, ERTS gained 5.9% in night trading after beating Q3 estimates and guiding above Street views. Shares, though, couldn't hold onto all those gains and ended the following day's regular session up a smaller 1.1%.

On Nov. 2, 2006, ERTS advanced 7.8% after the company trounced estimates and guided higher. The gain expanded to 11.7% the next day.

On August 1, 2006, ERTS jumped 3.7% in night trading after beating Q2 expectations and issuing strong Q2 sales guidance. The shares gained further the next day, ending the regular session up 7.7%.

On May 3, 2006, ERTS dropped 6.9% in after-hours trading when the company topped Q1 expectations but issued guidance that was below Street views. The shares suffered more the next day, ending the regular session down 10.9%.

On February 2, 2006, ERTS rose 2.3% during after-hours trading when the company beat Q3 sales estimates but missed on sales and predicted Q4 results would be below Street views. The shares dipped the next day, ending down 0.8% in the regular session.

On November 1, 2005, ERTS inched up 1.5% in evening trading after beating Q2 estimates. Despite also guiding Q3 below Street forecasts, the shares added to those gains the next day, ending up 7.9%.

On July 26, 2005, ERTS dropped 2.8% in night trading after the company beat Q1 estimates but said it expected fiscal year earnings to fall below expectations. The shares managed to come back a little in the following day session, ending down only 0.2%.

The stock tumbled 11.4% the night of May 3, 2005, after posting better-than-expected Q4 revenue and in-line EPS, but guiding Q1 significantly below First Call targets. It narrowed its loss in the May 4 regular session, closing down 6.5%.

ERTS jumped 4.2% the night of Jan. 25, 2005 after the company beat on EPS and guided its sales ahead of expectations. Buyers added to the upside on Jan. 26, launching the stock to a 9.2% gain by the closing bell.

On Oct. 19, 2004, ERTS declined 5.1% in night trading after the company reported EPS below estimates and guided lower. Traders narrowed the downside between the bells on Oct. 20, closing the stock off 4%.

ERTS slipped 2.3% the night of July 22, 2004 after the company beat estimates and guided to the high end of sales expectations. The stock was hit with more aggressive selling the next day and ERTS tumbled 5.3% by the July 23 bell-to-bell close.

Finally, on April 29, 2004 ERTS blew past earnings expectations and the stock jumped 4.1% in after-hours trading. The upside was unable to hold the bulk of those gains, and ERTS ended the April 30 regular session with a more modest 1.3% advance.

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

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Tagged: , Multimedia & Graphics Software, Earnings
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