Schaeffer's Trading Floor Blog

Earnings on Deck: Facebook Inc (FB), Zynga Inc, and QUALCOMM, Inc.

Previewing FB, ZNGA, and QCOM ahead of their upcoming earnings reports

by 4/22/2014 2:33 PM
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Earnings season is in full swing this week, though the heart of the tech-sector batting order is still on deck. Along with Apple Inc. (NASDAQ:AAPL), social networking concerns Facebook Inc (NASDAQ:FB) and Zynga Inc (NASDAQ:ZNGA), as well as digital communications specialist QUALCOMM, Inc. (NASDAQ:QCOM), will unveil their quarterly reports tomorrow night. Here's a quick look at these names as earnings approach.

  • Facebook Inc (NASDAQ:FB) will report first-quarter earnings after the close tomorrow. The company has matched or exceeded analysts' per-share profit predictions in six of the past seven quarters, averaging a gain of 8.3% in the subsequent session. In fact, the shares jumped 14.1% in the session after Facebook's last earnings report. Despite its stellar earnings history, FB puts have been picking up steam. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 0.57 sits just 4 percentage points from an annual high. In other words, option traders have bought to open FB puts over calls at a much faster-than-usual clip during the past couple of weeks. At last check, the shares of FB have added 2.9% to flirt with $63.01, thanks to a pre-market upgrade at Credit Suisse.

  • Zynga Inc (NASDAQ:ZNGA) will also unleash its first-quarter figures after the close tomorrow. While the company has met or topped the Street's bottom-line estimates in seven of the past eight quarters, the stock averages a one-week post-earnings loss of 2.3%. However, in the wake of its last earnings report, ZNGA rallied 25.6% in the subsequent week. Ahead of tomorrow's report, options players are exercising more caution than usual. The security's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.25 stands higher than 69% of all comparable readings from the past year. Likewise, analysts are skeptical, as just two out of 19 brokerage firms have doled out "strong buy" opinions. In afternoon trading, ZNGA is following its sector peers into the black, up 1.6% at $4.54.

  • Finally, QUALCOMM, Inc. (NASDAQ:QCOM) will release its fiscal second-quarter earnings tomorrow night. The firm has matched or topped analysts' per-share estimates in five of the past seven quarters, averaging a one-week post-earnings gain of 2.2%. Against this backdrop, options traders and analysts are in the bullish corner ahead of tomorrow's report. The stock's 10-day ISE/CBOE/PHLX call/put volume ratio of 4.13 stands just 7 percentage points from a 12-month acme, and 20 out of 26 brokerage firms offer up "buy" or better endorsements. At last check, QCOM is fractionally higher at $81, after Bernstein lifted its price target on the equity to $90 from $85.

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