Schaeffer's Trading Floor Blog

Earnings on Deck: Intel Corporation, Bank of America Corp, and eBay Inc

Taking a closer look at INTC, BAC, and EBAY ahead of their earnings reports

by 7/15/2014 2:09 PM
Stocks quoted in this article:

Corporate earnings season is quickly picking up speed, and after tonight's close, blue chip Intel Corporation (NASDAQ:INTC) will take its turn in the limelight. Tomorrow, financial firm Bank of America Corp (NYSE:BAC) will unveil its quarterly results ahead of the open, while online auctioneer eBay Inc (NASDAQ:EBAY) will report its numbers after the close. Here's a quick look at this trio of names as earnings approach.

  • As noted, INTC will report earnings after tonight's closing bell. The company has matched or exceeded analysts' bottom-line estimates in six of the past eight quarters, resulting in an average single-session post-earnings loss of 1.2%. However, the stock bucked this trend following its last turn on the earnings stage in mid-April, tacking on 0.6% the following day. On the charts, Intel Corporation has put in a stellar performance of late, and today, the security tagged a fresh 10-year peak of $31.72, before easing back to its current perch at $31.60. For INTC's second quarter, Wall Street is calling for a profit of 52 cents per share -- a 13-cent improvement over the firm's year-ago results.

  • Earnings from the financial sector have been a focal point this week, and tomorrow morning, BAC will report its second-quarter results. Over the past eight quarters, the company has bested earnings estimates six times. The stock's post-earnings performance hasn't translated, though, with the shares averaging a loss of 1.4% in the subsequent three-session period. This negative price action has done little to sway the bullish bias in the equity's options pits, and in today's session, the stock's July 16 call is seeing some buy-to-open activity. At last check, the stock was trading at $15.69, meaning Bank of America Corp would need to rise more than 2% for the front-month contracts to be in the money.

  • Over the previous eight quarters, EBAY has matched or exceeded consensus bottom-line estimates each time, but the stock has failed to capitalize on these fundamental wins. Specifically, the equity averages a loss of 0.5% in the subsequent session, which widens to 2% going out one week. For the company's second quarter, analysts are expecting a per-share profit of 68 cents -- a nickel more than what eBay Inc earned one year ago. Ahead of tomorrow's results, more than two-thirds of brokerage firms maintain a "buy" or better rating on EBAY, and the average 12-month target price of $60.56 stands well above the equity's current price of $50.71. Another poorly received report could have some of this sanguine group following in the footsteps of Pacific Crest and Susquehanna, which just yesterday, issued bearish brokerage notes toward the security.

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