Schaeffer's Trading Floor Blog

Earnings on Deck: Microsoft Corporation, Amazon.com, Inc., and Sirius XM Holdings Inc.

Previewing MSFT, AMZN, and SIRI ahead of their upcoming earnings reports

by 4/23/2014 2:21 PM
Stocks quoted in this article:

The line for the earnings confessional is out the door, with a slew of notable names waiting to report. Among them are tech titan Microsoft Corporation (NASDAQ:MSFT), e-commerce giant Amazon.com, Inc. (NASDAQ:AMZN), and satellite radio issue Sirius XM Holdings Inc. (NASDAQ:SIRI). Here's a quick look at these names as earnings approach.

  • Microsoft Corporation (NASDAQ:MSFT) will unveil its fiscal third-quarter figures after the close tomorrow. The blue chip has bested the Street's per-share profit projections in five of the past seven quarters, and found itself in the black one week after its last two earnings reports. Nevertheless, MSFT puts are growing more popular, as the stock's 10-day put/call volume ratio on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands at 0.75 -- above 70% of all other readings from the past year. Likewise, short interest grew 14.5% during the past two reporting periods, reflecting skepticism on the Street. Should MSFT once again exceed earnings expectations, a mass exodus of option bears and/or a short-squeeze situation could add fuel to the stock's fire. At last check, MSFT has followed the broader equities market into the red, down 1.1% at $39.56.

  • Amazon.com, Inc. (NASDAQ:AMZN) will report first-quarter earnings after the close tomorrow. While the firm has fallen short of analysts' bottom-line estimates in five of the past eight quarters, the equity has averaged a one-week post-earnings gain of 2.5%. Short-term options traders and analysts are optimistic ahead of the event. The security's Schaeffer's put/call open interest ratio (SOIR) of 0.82 sits just 1 percentage point from a 12-month nadir, implying that short-term speculators have rarely been more call-heavy during the past year. Meanwhile, 24 out of 29 analysts offer up "buy" or better endorsements, with not a single "sell" to be found. In afternoon trading, AMZN is 1.3% lower at $325.07, despite inking an exclusive deal with HBO.

  • Finally, Sirius XM Holdings Inc. (NASDAQ:SIRI) will release its first-quarter earnings before the open tomorrow. The company has matched or exceeded the Street's per-share profit predictions in five of the past eight quarters, averaging a gain of 1.2% one week after reporting. SIRI calls have been growing more popular on the long side, as the stock's 10-day ISE/CBOE/PHLX call/put volume ratio of 19.86 rests just 4 percentage points from a 52-week acme. What's more, short-term traders are paying a pretty penny to bet on SIRI's post-earnings trajectory, as the equity's SVI of 42% stands higher than 90% of all comparable readings from the past year. At last check, SIRI is 1.4% lower at $3.17, in the wake of a price-target cut at Wunderlich.

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