BMC Software: A Strong Prospective Short Play If It Declines After Tonight's Earnings

| About: BMC Software, (BMC)
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BMC Software (NASDAQ:BMC) is scheduled to release Q3 earnings tonight. The average of analysts' estimates collected by Thomson Reuters is for a profit of $0.82 per share on revenue of $556 million.

BMC is favoring a widening trend in its share performance, widening its after-hours earnings-driven movement in the following regular session for 17 quarters and narrowing its post-earnings move 10 times.

Looking deeper into the data, shares have gained in response to earnings news 14 times, widening that move 7 times, or 50% of the time.

Its pattern of negative reactions to earnings news is more convincing. Declines have followed earnings reports 13 times and more aggressive, same-direction trade has been seen in 10 examples, or 77% of the time.

Here's the historical performance:

  • On Oct. 26, 2011, BMC shed 7.8% in after-hours trade after beating Q2 expectations and setting its guidance in a range that straddled the Street view. The stock dropped a deeper 12.2% in the following day's regular session.
  • On July 27, 2011, BMC declined 4.8% in night trade after missing revenue estimates. The stock was hit for deeper declines the next day, closing the July 28 regular session down 8.7%.
  • On May 4, 2011, BMC gained 3.9% in evening trade on the back of better-than-expected Q4 results and in-line guidance. The stock muscled higher the next day, closing the May 5 regular session up 4.4%.
  • On Feb. 2, 2011, the stock fell 2.4% after reporting mixed Q3 earnings. Shares rebounded with a 1.2% gain the next day.
  • On Oct. 28, 2010, the stock gained 4.6% during evening trading after an earnings and guidance beat. Shares rose a smaller 3.4% the next day.
  • On July 28, 2010, the stock eased 0.2% after a Q1 miss and in-line guidance for FY 2011. Shares fell 6% the next day
  • On May 5, 2010, BMC declined 2.9% in evening trade after missing Q4 expectations. It added to its downside the following day, closing the May 6 regular session down 3.2%.
  • On January 27, 2010, the stock was up 1.8% after a Q3 beat. Shares were up a slimmer 1.4% the next day.
  • On Oct. 29, 2009, BMC advanced 1.7% in after-hours trade after beating earnings expectations and raising its FY 2010 EPS view to a range above Street estimates. The stock lost its upside the following day, ending the Oct. 30 regular session down 0.1%.
  • On Aug. 4, 2009, the stock slipped 0.8% despite a Q1 earnings and guidance beat. The loss was a deeper 3.1% the next day.
  • On May 12, 2009, the stock fell 5.5% after missing with revenue though beating with earnings. Shares fell 7.5% the next day.
  • On Feb. 4, 2009, BMC advanced 4.6% in after-hours trade after topping earnings expectations and raising its guidance. The stock firmed een higher in the Feb. 5 regular session, rising 8.5% by the closing bell.
  • On Oct. 30, 2009, the stock gained 1.5% after beating by a nickel with EPS and guiding above the Street. Shares improved slightly the following day and the stock closed up 2.5%.
  • On July 24, 2008, the stock fell 2.5% during evening trading after BMC after a profit decline and in line guidance were reported. The loss accelerated to 7.4% the next day.
  • On May 15, 2008, BMC gained 4.2% in evening trade after topping Q4 expectations and setting its guidance above the Street view. BMC firmed higher the next day, closing regular session trade with a 6% rise.
  • On Feb. 7, 2008, the stock gained 4% during evening hours after the company beat with Q3 results and guided mostly above the Street. The stock reversed to close down 1.8% the next day.
  • On Nov. 6, 2007, the stock gained 3.1% during evening trading after BMC topped Q2 estimates and guided for FY 2008 EPS above forecasts and Q3 results in line. The stock trimmed its gain to 1.1% the next day.
  • On Aug. 6, 2007, BMC gained 4.1% in night trade after topping Q1 estimates. Shares added to those gains the next day to end the regular session up 7%.
  • On May 29, 2007, BMC shed 1.2% in after-hours trade after meeting on Q4 earnings but coming in shy on revenue. The stock turned from the red the following day, ending the May 30 regular session up 0.7%.
  • On Feb. 8, 2007, BMC dropped 5.2% despite topping Q3 estimates. Shares fell even further the next day, ending the regular session down 6.6%.
  • In the after-hours session of Nov. 8, 2006, shares rose 3.1% after the company beat expectations with its latest earnings and guided higher. The stock jumped 9.5% the next day.
  • On Aug. 8, 2006, BMC gained 0.2% in after-hours trade after the company beat Q1 expectations and set guidance that straddled the then-current Street view. BMC enjoyed more bullish upside momentum the following day, closing the Aug. 9 regular session up 4.7%.
  • On June 7, 2006, shares fell 1.5% in the evening session despite the company reporting ahead of the Street and guiding for full-year results above the FC mean. The decline widened just marginally the next day, with shares finishing down 1.6%.
  • On Feb. 7, 2006, BMC fell 2.4% in the evening session after beating with earnings but missing with revenue; it guided mostly higher for the coming quarter. The stock snapped back to post a 2.9% gain the next day.
  • On Nov. 2, 2005 shares gained 6.3% after the company beat the Street's view with Q2 non-GAAP EPS of $0.26 per share. It also guided above analysts' estimates for 2006 EPS. However, the gain slimmed to 4.2% during the next regular session.
  • On August 2, 2005, BMC rallied 11.5% in the night session after the company topped Q1 estimates and raised FY guidance above Street estimates. The shares, though, trimmed their gains the next day, ending the regular session up 7.2%.
  • On June 29, 2005, BMC missed Q4 EPS estimates but beat revenue expectations. It also forecasted FY06 EPS above Street estimates. Shares closed up 0.2% that night and widened their gains the next day, ending the regular hours session up 3.3%.

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