Schaeffer's Trading Floor Blog

Earnings on Deck: Akamai Technologies, Inc., Alcatel Lucent SA (ADR), and Yelp Inc

Taking a closer look at AKAM, ALU, and YELP ahead of tonight's earnings results

by 7/30/2014 11:01 AM
Stocks quoted in this article:

Wall Street has digested a bevy of earnings reports this week, and tonight, cloud concern Akamai Technologies, Inc. (NASDAQ:AKAM), telecom issue Alcatel Lucent SA (ADR) (NYSE:ALU), and online review agent Yelp Inc (NYSE:YELP) are all due to report. Here's a quick look at AKAM, ALU, and YELP as earnings approach.

  • One day after announcing a new joint venture with Microsoft Corporation (NASDAQ:MSFT), shares of AKAM are up 2.2% at $60.30. While the day's advance is testing recent resistance at this round-number area -- which coincides with peak call open interest in the August series of options -- another well-received earnings report could help catapult the stock through this congestion. In fact, after besting analysts' bottom-line estimates in each of the past seven quarters, AKAM has averaged a one-week post-earnings gain of 4.7%. For Akamai Technologies, Inc.'s second quarter, Wall Street is calling for a per-share profit of 55 cents -- a 9-cent improvement over what the company earned one year ago.

  • ALU has been charting a path steadily lower in 2014, with the stock off about 15% to churn near $3.73. If past is prologue, though, the security could be poised to pare a portion of these losses after it reports earnings this evening. Specifically, despite falling short of consensus bottom-line estimates in five of the past seven quarters, Alcatel Lucent SA (ADR) has averaged a single-session post-earnings gain of 2.4%, which widens to 4.9% when going out one week. Regardless, the brokerage bunch remains mixed toward the underperformer. While 70% of covering analysts maintain a "hold" or "sell" suggestion toward the stock, the consensus 12-month price target of $4.90 stands at a steep 31% premium to current trading levels, and in territory not charted since July 2011.

  • There's a bullish pre-earnings buzz building on YELP today, with the shares up 6.2% at last check to trade at $73.69. This isn't too surprising, though, considering over the past eight quarters, the equity has averaged a 10% gain in the three-session period subsequent to reporting. Another well-received report could shake some of the weaker bearish hands loose, with nearly 15% of the stock's float sold short at present. Additionally, the security could benefit from a round of post-earnings upgrades, as roughly 27% of covering analysts have levied a "hold" or "strong sell" suggestion toward YELP. For the company's second quarter, the consensus estimate is for a per-share loss of 3 cents -- a 2-cent decline over Yelp Inc's year-ago results.

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