MidnightTrader’s Earnings Play: Microsoft
Microsoft
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PowerRating) is slated to report its Q3 results after the bell tonight, and analysts polled by Thomson First Call are expecting the software giant to report a profit of $0.44 per share on revenue of $14.496 billion.
Traders will jump into this active-volume stock in the extended hours, though the extended-hours share move has, of late, routinely been pared by the closing bell the following day.
Microsoft is just favoring narrowing between the sessions, cutting back its after-hours trade in next-day action in nine of its last 16 quarterly earnings events. The near-term tendency is firm in a narrowing trend in the last seven consecutive quarters.
On Jan. 24, 2008, MSFT gained 4.6% in night trade after besting the Street’s estimates for Q2 and setting its outlook to match or beat expectations. That gain evaporated the next day as MSFT ended the Jan. 25 regular session down 0.9%.
On Oct. 25, 2007, MSFT leaped 11.2% in night trade after topping with Q1 results and setting its Q2 guidance in-line to higher than Street estimates. Traders shaved off some of that upside the following day, with MSFT closing the Oct. 26 regular session up 9.5%.
On July 19, 2007, MSFT slipped 1.8% in after-hours trade on the heels of better-than-expected Q4 revenue and guidance that straddled the then-current Street view. It saw some of that decline narrow the next day, ending the July 20 regular session off 1.1%.
On April 26, 2007, MSFT rose 4.2% in night trade after topping Q3 estimates and offering mixed guidance. Shares eased off those highs the next day, ending the regular session up 3.5%.
On Jan. 25, 2007, the stock gained 1.8% in the evening hours after the company tops with its latest figures and guides mostly in line. The gain was a slender 0.5% the next day.
Brooks McFeely is widely regarded as the leading expert on extended-hours trading. He is a Managing Partner for Brochet Capital Partners, LP and the founder of Midnight Trader, Inc. (www.midnighttrader.com), the leading provider of pre-market and after-hours trading analysis and news to retail and institutional investors.