Shuffle Master (SHFL) Slips Following Earnings Miss

1:05pm (EST)

Shares of Shuffle Master (SHFL, $14.95, down $0.48) are getting decked today after missing Wall Street expectations on Monday’s close. The company reported a profit of 18 cents a share on revenue of $63.4 million while the suit-and-ties were looking for 20 cents a share on sales of $67.9 million.

We were looking for Shuffle Master to report a solid quarter after hearing Macau posted strong revenues in August but China couldn’t make up for the higher costs the company occurred during the quarter. The results were still better than their year-ago numbers as profits rose 14% but the bar was set a little too high for the recently ended quarter.

We did some research over the weekend and we had listed a possible strangle option trade but we decided to go with just call options which took a slight hit today. Shares have traded to a high of $15.75 and a close above $16 could spark some short-covering.

Earnings are always tricky but we like Shuffle Master for the long-haul. If support holds and shares can recover or hold steady, we may make it a fixture in our Weekly Wrap portfolio.

As far as the market, the bulls are pushing resistance ahead of tomorrow’s big headline event. Germany will be voting on the constitutionality of the bailouts and the news should be our before Wednesday’s opening bell. This means futures will be volatile but will offer direction on which way the market opens.

And while we are on the subject of bailouts, we mentioned in our Weekly Wrap and on Monday morning the U.S. debt ceiling would be in focus over the next few weeks and today the U.S. surpassed $16 trillion in national debt as you can see from the screen shot. Of course, it surges about $5,000 a second so this is already old.

As we head to press, the Dow is up 83 points to 13,337 while the S&P is advancing a six-pack to 1,435. The Nasdaq is higher by 5 points to 3,109.

Subscribers, check the Members Area for the updates and make sure you finish taking profits on Green Mountain Coffee Roasters (GMCR, $31.77, up $1.41) which has been a monster gain for us in one trading day.

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Shuffle Master (SHFL) Slips Following Earnings Miss

CFTC Disclosure: