If History Serves, Advanced Micro Devices Will Overreact After Hours

The semiconductor sector is one to watch in the after-hours following Intel’s (INTC) better than expected earnings and explosive surge after the bell Tuesday. The next headliner in this sector is Advanced Micro Devices (AMD) which is expected to report Q1 results tonight after the close. The Thomson FC mean is for a loss of $0.51 per share on $1.5 billion in revenue.

AMD is favoring a narrowing trend in the near-term, with three narrowing events in the last four quarters; the exception coming in the most recent quarter. Over the long-term, AMD favors a narrowing pattern, either cutting back or reversing its evening trade nine times in the last 15 events, and seeing flat trade between the sessions in another instance.

• On Jan. 17, 2008, the stock gained 4.3% during evening trading after AMD reported a sales miss. The gain swelled to 11.5% the next day.
• On Oct. 18, 2007, AMD clawed 0.3% higher in after-hours trade after beating Q3 expectations. It couldn't hold on to this slight gain and closed the Oct. 19 regular session with a deep 5.1% decline.
• On July 19, 2007, AMD jumped 4.5% in after-hours trade after beating Q2 revenue expectations. It lost that gain the following day, ending the July 20 regular session down 1.7%.
• On April 19, 2007, the stock was up 0.8% after revenues decline vs a year ago and the company guides for revs in line to up slightly. Shares ended down 1.4% the next day.
• On January 23, 2007, AMD dropped 4.3% in night trade after beating Q4 sales estimates but guiding Q1 below Street views. Shares tumbled further the next day, ending the regular session down 8.4%.
• On Oct. 18, 2006, AMD slid 9.2% in after-hours trade despite topping Q3 sales estimates. The shares tumbled further the next day, closing the regular session down 13.2%.
• On July 20, 2006, AMD reported revenue shy of expectations, and the stock declined 3.8% in after-hours action. Sellers hammered the issue in the July 21 regular session, crushing it 15.6% by the closing bell.
• On April 12, 2006, shares fell 2% in evening trading after the company reported in line and guided for Q2 flat to slightly lower. The loss swelled to 10.2% the next day.
• On Jan. 18, 2006, AMD advanced to the 37.80 level (no percentage data available as an exchange trade reporting error that day made the after-hours percentage data inaccurate). The evening gain followed better-than-expected Q4 results and flat to slightly down sales guidance. The stock maintained its upside on Jan. 19, but buyers scaled back the gains, and AMD closed that day's regular session at 37.13 (up 8.7%).
• On Oct. 11, 2005, AMD climbed 1.3% in after-hours trade after the company beat Q3 expectations. This upside momentum failed to hold through the Oct. 12 regular session and sellers punished the issue between the bells, driving it down 12.5% by the close.
• On July 13, 2005 AMD advanced 3.2% in night trade after the company reported sales flat with year ago levels and a decline in earnings. It failed to move much in either direction off this evening level and ended the July 14 regular session up the same 3.2%.
• Back on April 13, 2005 AMD advanced 1.5% in night trade after the company reported a decline in sales vs. a year ago and posted a loss. The stock saw its after-hours gains evaporate in next-day trade and ended the April 14 session down 4.7%.
• On Jan. 18, 2005 AMD slid 1.8% in after-hours trade after the company posted a loss, reported revenue just ahead of estimates, and forecast flat to lower sales. The stock fought its way out of the red on Jan. 19, ultimately ending the regular session at the flat line.
• On October 7, 2004 AMD reported in line results and the stock eked out a thin 0.2% rise. Sellers hit the issue hard the next day, pressuring it 4.3% lower by the October 8 bell-to-bell close.
• AMD slipped 0.6% the night of July 14, 2004, after company beat revenue expectations and reported EPS in line with estimates. The stock fell victim to heavier downside momentum on July 15, losing 5.6% by the close of trade.

History indicates a trade against the trend after-hours this evening is the best play. In other words, the stock tends to over react in the after-hours following its earnings relative to the following day's regular session close

Disclosure: no position.