Schaeffer's Trading Floor Blog

Earnings on Deck: LinkedIn Corp, Skullcandy Inc, and Burger King Worldwide Inc

Taking a closer look at LNKD, SKUL, and BKW ahead of their earnings results

by 7/31/2014 10:54 AM
Stocks quoted in this article:

Second-quarter earnings season is quickly winding down. This week, however, there are still a number of notables set to hit the confessional, including professional networking site LinkedIn Corp (NYSE:LNKD), headphones maker Skullcandy Inc (NASDAQ:SKUL), and fast-food concern Burger King Worldwide Inc (NYSE:BKW). Here's a quick look at LNKD, SKUL, and BKW as earnings approach.

  • Over the past eight quarters, LNKD has matched or exceeded analysts' bottom-line estimates each time, resulting in an average single-session post-earnings gain of 1.4%. When LinkedIn Corp steps onto the earnings stage after tonight's close, Wall Street is calling for a per-share profit of 39 cents -- one cent more than what the company earned one year ago. On the sentiment front, short sellers have been upping the bearish ante toward a stock that's shed 16% year-to-date to trade at $181.47. Over the past two reporting periods, specifically, short interest jumped 25.7%, and is now lingering at levels not seen since December 2012.

  • SKUL has experienced some wild single-session post-earnings price swings over the past eight quarters, including a 24.2% pop in March, and a 22.5% plunge in March 2013. On average, though, the equity has shed 1% in the session subsequent to reporting, which widens to 3.1% going out one week. Another post-earnings move lower for SKUL could prompt a round of price-target cuts, considering the consensus 12-month price target for Skullcandy Inc sits at $8.36 -- or 21.5% above the equity's current perch at $6.88. For tonight's second-quarter results, analysts are expecting a per-share profit of one penny.

  • In the wake of weaker-than-expected earnings from sector peers McDonald's Corporation (NYSE:MCD) and Yum! Brands, Inc. (NYSE:YUM), BKW is slated to report its own quarterly results bright and early tomorrow morning. Over the past eight quarters, the company has matched or exceeded consensus profit estimates each time, which has translated into an average single-session post-earnings gain of 1.3% for the stock. Another well-received report could shake some of the skeptics loose, which might help Burger King Worldwide Inc extend its 15% year-to-date lead. Among covering analysts, 75% maintain a "hold" or "sell" suggestion toward the equity, while the average 12-month price target of $27.86 stands at a slim 5.7% premium to BKW's present price of $26.36. Meanwhile, short interest accounts for 10% of the stock's float, representing three weeks' worth of pent-up buying demand, at average daily trading levels.

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