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Bank of America (BAC) has typically been a short favorite in its post-earnings trade over the last four years.

The stock has recorded an earnings-driven pre-market decline in eight of the last 14 quarters we've tracked in our MidnightTrader database. In six of those eight quarters, or 75% of the time, BAC added to its downside in the follow-on regular session and ended the day with a sharper decline than what it posted in the pre-market. Shorts will be keyed up on a negative early move.

Even an early day upside move holds out prospects for shorts Thursday as BAC has only seen six earnings-driven pre-market gains over the last 14 quarters, and in five of those six events the stock reversed direction and either narrowed its gains or ended the follow-on regular session in the red.

BAC is due with its Q1 report in the pre-market on Thursday, April 19, and analysts polled by Thomson Reuters expect the bank to post a profit of $0.12 per share on revenue of $22.51 billion.

Here's the historical performance data:

  • On Jan. 19, 2012, BAC jumped 6.1% in pre-bell action after posting better-than-expected Q4 revenue and in-line earnings. The stock lost much of its upside in the regular session, ending up 2.3%.
  • On Oct. 18, the stock gained 3.6% in pre-market trading after reporting higher revenues. Shares jumped 10.1% during that day's regular session.
  • On July 19, 2011, BAC eked out a 0.2% advance in pre-bell trade after beating Q2 sales estimates but also posting a loss. The stock reversed direction in the following regular session, ending down 1.5%.
  • On April 15, 2011, BAC edged up 0.7% in pre-market action after missing earnings estimates. The stock lost its upside in that day's regular session, closing the day off 2.3%.
  • On Jan. 21, 2011, BAC slid 0.9% in pre-bell trade after missing Q4 estimates. The stock turned deeper in the red in that day's regular session, closing down 1.9%.
  • On Oct. 19, 2010, the stock fell 0.8% in pre-market action after an earnings beat but a revenue miss. Shares closed regular trading down 4.3%.
  • On July 16, 2010, BAC declined 4.8% in pre-bell trade after reporting a year-over-year decline in Q2 results. The stock was hit for sharper losses in that day's regular session, ending down 9.1%.
  • On April 16, 2010, the stock slipped 0.3% during pre-market trading after Q1 results declined compared to the year-ago quarter though beat Street expectations. The loss grew to 5.5% during regular trading later that day.
  • On Jan. 20, 2010, BAC slipped 0.5% during pre-market action after reporting a loss that missed the Street view, based on a TARP repayment. The stock improved to close up 1% during that day's regular session.
  • On Oct. 16, 2009, BAC slid 5.1% in pre-market trade after reporting a deeper-than-expected Q3 loss. The stock narrowed its decline slightly in that day's regular session, ending down 4.6%.
  • On July 17, 2009, BAC edged up 0.4% in pre-bell trade after beating earnings expectations. The stock lost that gain in the follow-on regular session, ending July 17 bell-to-bell action down 2.1%.
  • On April 20, 2009, BAC slumped 7.9% in pre-market action despite reporting results ahead of Street estimates. The stock added to its downside in that day's regular session, ending down a hefty 24.3%.
  • On Jan. 16, 2009, BAC jumped 7.5% ahead of the opening bell after reporting a swing to a loss and lower than expected revenue. The stock reversed direction in the Jan. 16 regular session, ending down 13.7%.
  • On Oct. 6, 2009, BAC was hit for a 9.6% decline in after-hours trade after reporting a year-over-year decline in earnings, cutting its dividend and announcing a stock sale. The stock was hammered lower in the Oct. 7 regular session, ending down 26%.

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

Source: BofA Maintains Status As Short Favorite Off Earnings-Driven Pre-Market Declines Or Gains

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