Monday's Earnings

Monday's Earnings

Here’s a look at companies that are reporting today:

Bank of America (BAC, $38.56). The company just reported earnings of $1.2 billion, or $0.23 a share on $17 billion in revenue. Analysts had expected earnings of $0.41 and revenue of $16.5 billion. Here again, a mixed report as earnings were below estimates while revenue was higher. BoA’s acquisition of subprime mortgage lender Countrywide Financial should take place later in the year.

Haliburton (HAL, $47.43). The stock is up about 20% for the year and is sitting at 52-week highs. The company earned $584 million, or $0.64 a share. Revenue came in at $4 billion. An overlooked stock by many but a solid performer no doubt.

Merck (MRK, $39.76). The drug company had good things to say this morning as it reported it earned $3.3 billion, or $1.52 a share on revenues of $5.8 billion. Sales we below estimates of $6.1 billion. Merck also said it expects to earn $3.28 to $3.38 a share for the year while analysts expected $3.28. The stock is up 49 cents to $40.25 in early-morning trading

Netflix(NFLX, $38.56). Can you believe this stock is up 50% for the year? The company reports after the bell and forecasts predict the company will earn $0.21 a share on revenue of $327 million. It will be interesting to see how the DVD rental business shakes out. Blockbuster (BBI, $3.07) launched a $1 billion hostile takeover bid for Circuit City (CC, $4.73) which could ultimately help Netflix if it goes through. Some believe that if Blockbuster buys Circuit City it would make Blockbuster less competitive online. Netflix’s earning reports over the past year have been up and down but the bet here is that they at least match or beat expectations. If so, the May 40 calls (QNQEH, $2.35) could see some action.

Texas Instruments (TXN, $29.60). The company also reports after the bell today. Wall Street expects them to earn $0.43 a share for the quarter. I’m not a big fan of TI especially after they missed 4Q numbers and reduced their 1Q outlook last month. The company continues to lose market share and right now it appears that the stock could fall even further. The May 27.50 puts (TXNQY) are selling for 40 cents.

Rick Rouse
Rick@OptionsMentoring.com

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