Schaeffer's Trading Floor Blog

Earnings on Deck: General Electric Company, Advanced Micro Devices, Inc., and Chipotle Mexican Grill, Inc.

Previewing GE, AMD, and CMG ahead of their upcoming earnings reports

by 4/16/2014 1:30 PM
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Earnings season is heating up, with a pair of tech-sector earnings helping to light up the charts today. Still slated to report this week are blue-chip conglomerate General Electric Company (NYSE:GE), semiconductor concern Advanced Micro Devices, Inc. (NYSE:AMD), and restaurateur Chipotle Mexican Grill, Inc. (NYSE:CMG). Here's a quick look at these names as earnings approach.

  • General Electric Company (NYSE:GE) will report first-quarter earnings before the open tomorrow. The firm has matched or topped analysts' per-share profit predictions in each of the past eight quarters, yet averages a one-week post-earnings gain of just 0.3%. Ahead of tomorrow's report, options players have picked up GE puts over calls at a slightly accelerated clip, as the stock's 10-day put/call volume ratio of 0.32 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than 61% of all comparable readings from the past year. In today's action, however, calls are the options of choice, with intraday volume running at a 52% mark-up to GE's average pace. Digging deeper, it seems eleventh-hour bulls are buying to open the April 26 and 26.50 calls, which expire at the close tomorrow. At last check, GE is 0.8% higher at $26.02.

  • Advanced Micro Devices, Inc. (NYSE:AMD) will unveil its first-quarter figures after the close tomorrow. The company has topped the Street's bottom-line estimates in six of the past eight quarters, yet averages a hefty loss of 10% in the week after reporting. Despite their limited profit potential -- AMD is trading at $3.76, a 0.9% drop -- puts are picking up steam on the long side. The security's 50-day ISE/CBOE/PHLX put/call volume ratio of 0.39 sits just 13 percentage points from an annual high. Echoing this, intraday put volume is running at twice the norm today, with potential buy-to-open activity spotted at the May 3 strike. Elsewhere, short interest accounts for more than 20% of the stock's total available float, representing six sessions' worth of pent-up buying demand, at AMD's average daily trading volume.

  • Finally, Chipotle Mexican Grill, Inc. (NYSE:CMG) is slated to report first-quarter earnings ahead of the bell tomorrow. The firm has matched or exceeded analysts' per-share predictions in five of the past eight quarters, averaging a one-week post-earnings gain of 1%. As such, CMG calls have grown increasingly popular during the past couple of weeks, as the stock's 10-day ISE/CBOE/PHLX call/put volume ratio of 0.89 registers in the 82nd percentile of its annual range. Plus, the equity's Schaeffer's put/call open interest ratio (SOIR) stands at a 12-month low of 0.91, implying that short-term options players haven't been more call-skewed during the past year. In today's session, CMG is 1.8% higher at $549.99, and call volume is running at twice the normal clip.

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