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Earnings This Week: Hovnanian, Ciena and ADC Telecom
This coming week may be a shortened one, but it won't be without its slew of earnings and economic reports. Investors will get a feel for the temperature of the housing market when Hovnanian Enterprises Inc. (HOV) and Toll Brothers (TOL) release quarterly results this week. Also, investors will want to see if business spending has picked up for telecommunications equipment makers when Ciena Corp and ADC Telecommunications reports quarterly results on Thursday. Earlier this month, ADC said clients plan to curb spending in the second half. insert.a.chart.HOV On Friday, the unemployment report for August will be released. The jobless rate has been trending higher, rising to 5.7% in July from 5.5% in June and the labor market continues to show signs of weakness. Weekly jobless claims remain above a key level of 400,000, and first-time filings for unemployment insurance are at levels consistent with a weakening labor market. As for earnings, Hovnanian Enterprises Inc. gets set to report quarterly results after the market close on Wednesday. Shares have seen a 56% jump since they hit their most recent low of $4.64 on July 7th but with most of the bad news already out on homebuilders, shares may still have room to go higher. New Jersey's largest homebuilder is expected to report a wider third-quarter loss than last year of $1.56 per share and a 37% drop in revenue of $713.4 million, according to Thomson Reuters. In the near term, shares have widened three out of the past four quarters. On June 4, Hovnanian shares fell 6.9% in the pre-market after sales beat but its loss per share was much wider than the year-ago quarter. The regular session loss was a deeper 10.1%. On Thursday, Ciena Corporation (CIEN) releases its third-quarter results before the market opens. Shares of the maker of network equipment for AT&T Inc are only about 9% above their 52-week low and trade at less than 14 times reported earnings, so shares have a lot of room to move higher. Ciena also has a near-term tendency to move wider in the following regular trading session, doing so three out of the past four quarters. On June 5, shares fell 3.3% after the company's results beat the Street but its forecast disappointed investors. Shares fell further in the regular session, sliding 7.8%. ADC Telecommunications Inc. (ADCT) is another stock that likes to widen its pre-market moves. The supplier of equipment to AT&T (T) and Verizon Communications Inc. (VZ) reports results after the close of trading on Thursday and is expected to report a 30% drop in earnings to $0.26 per share on sales of $388.7 million, according to analyst estimates. Much of the company's bad news has already been priced into the stock. In July, the company slashed its earnings outlook by almost half for the year and shares fell below $10.00 per share. When the company reported second-quarter results that beat the Street on June 4, shares rose 3.9% after the close and added onto the gains the following regular session, ending up 9.1%. by Brooks McFeely (The After-Hours Trading Community) Disclaimer: Please note that charts and commentary provided by the moderator are for educational purposes only. Any trades placed upon reliance on the moderator’s charts or information is taken at your own risk for your own account. Past performance is no guarantee of future results. While there is great potential for reward trading stocks, futures and options, there is also substantial risk of loss and you must decide your own suitability to trade. Future trading results can never be guaranteed. This is not an offer to buy or sell stock, futures, options or commodity interests. Most trading systems are based on historical formulas which have worked in the past. However, what has happened before may or may not happen again. You can lose all your money trading stocks, futures, and options and you must decide your own suitability as to whether or not to trade. Only trade with true risk capital you can afford to lose. Only trade markets you can properly afford to trade. Properly funded trading accounts typically perform better than those that are not. Never risk more than 2-3% of your account on any one trade. Always define your risk before entering a trade and place a stop to limit your risk. There are no guarantees or certainties in trading. Trading involves hard work, risk, discipline and the ability to follow rules and trade through any tough periods during a system’s draw downs. If you are looking for a guarantee, trading is probably not for you. Most people lose money trading. One of the reasons is that they lack discipline and are unable to be consistent. A system can help you become consistent. Ironically, worrying about the monetary aspect of trading can contribute to and cause a trader to make trading errors. Therefore, it is important to only trade with true risk capital. |
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