Earnings Preview: Rite Aid Reports Q3 Results Thursday

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 |  About: Rite Aid Corporation (RAD)
by: Robert Weinstein

Rite Aid Corporation (NYSE:RAD) is scheduled to release last fiscal quarter's results before the opening bell on December 15, 2011.

RAD trades an average of 7.2 million shares per day.

  • 52 Week High: $1.47
  • 52 Week Low: $0.85
  • Book Value: $-2.62
  • Float Short: 9.13%

On average, analysts are expecting a drop of $-0.01 in earnings per share compared to last quarter's results of $-0.11. A beat of $-0.12 per share, will top the estimated per share earnings. Analyst estimates range between $-0.15 and $-0.09 per share.

Rite Aid stock had a nice run up today in price moving up 2.5% and trading above the major moving averages. The volume today was light but looking into earnings, the chart looks positive, especially for such a low price stock. Expectations are already set low with another quarter of expected losses. Short interest is getting high in percentage terms and compared to the daily volume. The amount of short interest combined with such a low price could be setting up Rite Aid for a very large short squeeze. I am adding Rite Aid to my daily news scanner to follow the company into earnings.

The company has falling revenue year-over-year of $25.21 billion for 2011 vs. $25.67 billion for 2010. The bottom line has falling earnings year-over-year of $-555.42 million for 2011 vs. $-506.68 million for 2010.The company's earnings before interest and taxes are rising with an EBIT year-over-year of $23.78 million for 2011 vs. $12.70 million for 2010.Lower revenue along with a drop in earnings is often one of the last signs to get out of the way of a falling stock price.

Here is a look at the fiscal year revenue.

paid2trade.com revenue gross bar chart for RAD Click to enlarge

Gross reported revenue compared to the mean estimate (rounded).

Fiscal Quarter Ending Month-Year Revenue Estimates Actual $ Difference Difference %
Aug-11 $ 6.23 B $ 6.27 B $ 42.11 M 0.68%
May-11 $ 6.36 B $ 6.39 B $ 26.21 M 0.41%
Feb-11 $ 6.38 B $ 6.46 B $ 77.16 M 1.21%
Nov-10 $ 6.21 B $ 6.20 B $ -5.36 M -0.09%
Aug-10 $ 6.19 B $ 6.16 B $ -32.73 M -0.53%
Click to enlarge

M = millions, B = billions

Differences are rounded. (Some onetime items are often excluded in reported EPS)

paid2trade.com Quarterly Estimates And Actual EPS results RAD Click to enlarge

Reported earnings per share compared to the mean estimate. Differences are rounded.

The total short interest number of shares for RAD:

paid2trade.com short interest tool. The total short interest number of shares for RAD Click to enlarge

The number of days to cover short interest based on average daily trading volume for RAD.

paid2trade.com number of days to cover short interest based on average daily trading volume for RAD Click to enlarge

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I use a proprietary blend of technical analysis, financial crowd behavior, and fundamentals in my short-term trades, and while not totally the same in longer swing trades to investments, the concepts used are similar. You may want to use this article as a starting point of your own research with your financial planner. I use Seeking Alpha, Edgar Online, and Yahoo Finance for most of my data. I use the "confirmed" symbols from earnings.com that I believe to be of the most interest.

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