MidnightTrader Earnings Play: Agilent Technologies
Investors should consider shares of Agilent Technologies
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PowerRating) following its earnings after the close Friday.
The stock has fallen with the rest of the techs, dropping nearly 35% since the end of September alone. The company’s earnings release will tell the story after-hours which is likely to begin and end with the realization that this baby has been thrown out with the bath water.
This bio-analytical and electronic measurement solutions company provides to the life-sciences and broader health care sector which hasn’t seen as rapid deterioration relative to the rest of the non-health care tech economy.
Stay tuned to pre-market trading Friday morning as investors react to Agilent’s earnings news and send a strong signal that the stock price reflects the worst case scenario which hasn’t materialized. Analysts polled by Thomson Financial expect the company to report a Q4 profit of $0.59 per share on revenue of $1.54 billion.
Trading in the pre-market Friday will tell the tale, as the extended-hours earnings related price move in Agilent tends to provide a clear forecast of the near term direction of the stock. Taking a look back, the stock tends to extended gains or losses from the pre-market to the following regular session and beyond. The consistency is staggering, with the stock seeing more aggressive follow-through price action into the days and weeks following.
The quarterly earnings reaction data going back to 2005 demonstrates the same pattern as the last four quarters below.
On Aug. 14, 2008, Agilent advanced 0.6% in after-hours trade after coming in with revenue shy of Street forecasts and setting its guidance below expectations. The stock cut its upside slightly the next day, ending the Aug. 15 regular session up 0.5%.
On May 15, 2008, the stock gained 4.1% during evening trading after A reported better-than-expected results and outlook. The gain improved to 8.6% by the closing bell the following day.
On Feb. 13, 2008, Agilent declined 0.5% in after-hours trade after beating Q1 expectations and offered mixed guidance. It added to its downside in the Feb. 14 regular session, losing 3.5% by the closing bell.
On Nov. 15, 2007, A advanced 2.4% in after-hours trade after topping Q4 expectations. It firmed even higher the next day, rising 8.9% by the Nov. 16 closing bell.
If traders bid up shares of Agilent following its earnings release ahead of the open Friday, consider taking a long position in the pre-market and let history prove its value.
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