Schaeffer's Trading Floor Blog

Earnings on Deck: Hasbro, Inc., Netflix, Inc., and Texas Instruments Incorporated

Taking a closer look at HAS, NFLX, and TXN ahead of their earnings reports

by 7/18/2014 12:31 PM
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Second-quarter earnings season kicks into high gear next week, with toymaker Hasbro, Inc. (NASDAQ:HAS) taking its place in the limelight bright and early Monday morning. After the close, quarterly reports from streaming giant Netflix, Inc. (NASDAQ:NFLX) and semiconductor concern Texas Instruments Incorporated (NASDAQ:TXN) are due. Here's a quick look at this trio of names as earnings approach.

  • Hasbro, Inc.'s second-quarter earnings report comes on the heels of yesterday's disappointing results from sector peer Mattel, Inc. (NASDAQ:MAT), with analysts expecting HAS to earn a per-share profit of 36 cents. Over the past eight quarters, Hasbro has bested bottom-line expectations six times, resulting in an average single-session post-earnings gain of 3%. Option traders have been growing increasingly bearish ahead of Monday morning's scheduled event, per the stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 3.64, which ranks in the 83rd percentile of its annual range. In today's session, the equity was last seen 0.3% higher at $53.07.

  • NFLX has a history of making volatile moves in the wake of its quarterly results. Over the past eight quarters, the stock has jumped an average of 5% in the session subsequent to reporting -- which includes a late-January 16.5% pop following a fourth-quarter bottom-line win. After the close on Monday, analysts are anticipating a second-quarter profit of $1.15 per share for Netflix, Inc. -- a 66-cent improvement over the company's year-ago results. Put buyers have been active on NFLX of late, and outside of the options pits, more than 9% of the equity's float is sold short. Should NFLX unveil another well-received earnings report, an unwinding of these bearish bets could help fuel the stock's fire. This afternoon, the security has extended its year-to-date lead to nearly 20%, up 0.4% to trade at $441.37.

  • Over the previous eight quarters, TXN has matched or exceeded consensus profit estimates each time, resulting in a single-session post-earnings advance of 1.1%, on average. For Texas Instruments Incorporated's second quarter, expectations are for a profit of 59 cents per share, which is one penny more than what the firm banked last year. Another bottom-line win could encourage the skeptical brokerage bunch to re-evaluate their ratings on the stock. Currently, 68% of covering analysts maintain a "hold" or worse suggestion toward TXN, while the consensus 12-month price target of $49.22 is just a stone's throw away from the security's present price of $48.76.

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