Shaw Group Inc. (NYSE:SHAW) reported a loss of 24 cents per share for the 3rd Quarter of 2012 on revenue of $1.6 billion. Analysts expected Shaw to earn 58 cents per share on $1.5 billion in revenue. Last quarter, the company hit earnings targets right on the nose.
The company recently announced the sale of its Energy and Chemicals business for $300 million to Technip. The company reported that 31 cents of the 24 cent loss came from costs of this sale. In the 4th Quarter an associated $49 million gain from the sale will be booked. Also during this quarter, they reported a previously-announced loss of 19 cents a share for a settlement with GenOn.
The results are not that bad considering the revenue beat and future gains to be reported. Keep in mind that the company has already announced a 4th quarter gain of $49 million, or about 74 cents per share. So, holding through the next quarter may not be a bad idea.
Since the open of the market, the stock has dropped over 2%. Now would be a good time to consider accumulating shares. Selling an out-of-the-money put option could give you additional income and potentially lock in a buying price below this current market price. The simple 50-day moving average is currently at about $27. Selling a $27 put option for an option premium of 40 cents would generate income of about 1.4% between now and July 20, 2012 expiration. Over 11 days, this is a 49% annualized return, if the stock simply trades above $27. If the put option is exercised, the basis in the stock will be reduced to about $26.60.
Also, reporting this week will be:
- Marriott International Inc (NYSE:MAR) - July 11th
- JPMorgan Chase & Co (NYSE:JPM) - July 12th
- Wells Fargo & Co (NYSE:WFC) - July 12th
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.