Schaeffer's Trading Floor Blog

Earnings on Deck: AT&T Inc., Facebook Inc (FB), and TripAdvisor Inc

Taking a closer look at T, FB, and TRIP ahead of their earnings results

by 7/22/2014 1:53 PM
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Wall Street has had a bevy of notable earnings reports to digest already this week, with more on the horizon over the next several sessions. Tomorrow, quarterly updates are expected from blue chip AT&T Inc. (NYSE:T), social networking site Facebook Inc (NASDAQ:FB), and online travel concern TripAdvisor Inc (NASDAQ:TRIP). Here's a quick look at this trio of names as earnings approach.

  • T will hit the earnings confessional after tomorrow's close, with analysts expecting a profit of 63 cents per share for Ma Bell's second quarter. Over the past eight quarters, AT&T Inc. has bested or matched consensus bottom-line estimates six times, and looking out one week, the shares have averaged a modest post-earnings gain of 0.1%. Although pre-earnings calls have been gaining in popularity on T, today's most active strike is the weekly 8/1 34.50-strike put, which is seeing buy-to-open activity. In other words, these option bears expect the security to retreat more than 4% from its current perch at $35.95, in order to breach the strike price by the close on Friday, Aug. 1.

  • FB's highly anticipated quarterly results will hit the Street after tomorrow's close. Thanks to six bottom-line wins over the past eight quarters, the stock has averaged a single-session post-earnings boon of 7.2%. In fact, in the wake of last year's second-quarter report, the equity surged nearly 30% in the subsequent session. Considering Facebook Inc is enjoying a more than 26% lead on the year, optimism has been running high toward the security. Among the brokerage bunch, specifically, 94% of covering analysts maintain a "buy" or better rating, with not a single "sell" to be found. Plus, the consensus 12-month price target of $78.12 stands at a 13% premium to FB's current price of $69.15, and in territory yet to be charted.

  • TRIP is also slated to report earnings after tomorrow's close. For the company's second quarter, Wall Street is calling for a profit of 61 cents per share -- a 9-cent improvement over TRIP's year-ago results. TripAdvisor Inc has a solid history in the earnings confessional, and has matched or exceeded analysts' profit estimates in seven of the past eight quarters. Not surprisingly, the stock has gone on to average a single-session post-earnings gain of 2.2%, which shoots to 5.7% when going out one week. The brokerage bunch is tilted toward the skeptical side, though, with 53% of analysts doling out a "hold" or "strong sell" suggestion toward the stock. Additionally, the average 12-month price target of $100.61 represents a discount to TRIP's present perch at $104.92. From a contrarian perspective, another well-received earnings report could prompt a round of upgrades and/or price-target hikes, which could help propel the security higher.

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