(By Rich Bieglmeier
) Traders and computer models have been unkind to earnings misses this quarter, iStock has seen stocks cut nearly in half on near misses and poor forward guidance. This week, we are going to try and isolate a company that appears ready to misfire on this week's quarterly profit check-up.
CARBO Ceramics Inc. (CRR
) reports its first quarter earnings results before the market opens on April 26, 2012. Wall Street believes the oil & gas equipment & services company will make a $1.42. The iStock iEstimate is $1.37 – a 5 cent downside surprise.
Analysts have made some big cuts in estimates as the announcement nears. Clearly, some believe the quarter and year will not be as robust as initially believed. Many peer companies that have reported in the last 30 days announced quarter-over-quarter declines in profits, and many have seen their stock prices get whammed. Eight of the 13 sector peers have seen the share prices fall by as much as 30% in the days surrounding their eps announcements.
CRR has a history of beating their consensus 14 of the last 16; however, they missed last time out and the stock got chopped by 24%. Big moves like that, both up and down, are commonplace in the last five quarterly profit reports, three big moves up and two major nosedives.
Option investors might find CARBO Ceramics Inc. (CRR) to be an excellent candidate for a straddle.