Schaeffer's Trading Floor Blog

Earnings on Deck: Cirrus Logic, Inc., General Motors Company, and Nokia Corporation (ADR)

Taking a closer look at CRUS, GM, and NOK ahead of their earnings results

by 7/23/2014 2:37 PM
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We're in the thick of earnings season, and in today's session, Wall Street is digesting reports from a number of notables including Apple Inc. (NASDAQ:AAPL) and Microsoft Corporation (NASDAQ:MSFT). Looking ahead, integrated circuit specialist Cirrus Logic, Inc. (NASDAQ:CRUS) will report earnings after tonight's close, while automaker General Motors Company (NYSE:GM) and technology device maker Nokia Corporation (ADR) (NYSE:NOK) will take their turns at the earnings plate bright and early tomorrow morning. Here's a quick look at this trio of names as earnings approach.

  • Over the past eight quarters, CRUS has bested analysts' bottom-line expectations each time. However, the stock's post-earnings price action doesn't translate, with CRUS averaging a single-session loss of 2.1% in the wake of its report. For the company's fiscal first quarter, Wall Street has forecast a per-share profit of 30 cents -- a 26-cent decline over Cirrus Logic, Inc.'s year-ago results. It appears option traders in today's session are gambling on another post-earnings slide, with buy-to-open activity detected at the stock's weekly 7/25 22-strike put. With CRUS last seen at $24.19, it would take a drop of nearly 10% by this Friday's close for these puts to move into the money.

  • GM's fundamental woes have been fodder for the Street for some time, and moments ago, the automaker announced a fresh round of recalls. Against this backdrop, the stock is down 0.4% to trade at $37.62. If history is any guide, the equity could be on pace to pare a portion of these losses after the firm reports earnings tomorrow morning. Specifically, the stock has averaged a single-session post-earnings gain of 1.2% over the past eight quarters, which widens to 1.9% going out one week. For General Motors Company's second quarter, the consensus estimate is for a profit of 59 cents per share, well below the 84 cents per share the firm banked one year ago.

  • Despite matching or exceeding analysts' profit expectations in each of the past seven quarters, NOK has averaged a loss of 3.6% in the subsequent session, which jumps to 5.3% the following week. On the charts, the stock has been struggling over the past month under the weight of its 40-day moving average -- currently located at $7.77 -- and in today's session, the stock was last seen 0.6% lower at $7.67. Despite the equity's recent technical troubles, six out of 20 covering analysts still maintain a "buy" or better rating toward Nokia Corporation (ADR), while the consensus 12-month price target of $8.46 stands in territory not charted since May 2011. Another poorly received earnings report may prompt a change of heart among these remaining holdouts, which could translate into near-term headwinds for NOK.

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