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Previewing Earnings for eBay, Intel, BofA, Citi & Others

the BullMarket.com Staff

Stocks tend to be most volatile around earnings season, when a good or bad report can make or break it. However, a good or even great earnings report doesn't necessarily translate into a huge pop for a stock.

During earnings season, BullMarket.com publishes a comprehensive 25- to 40-page Earnings Preview report for the week ahead each Friday.

Over the past year, BullMarket.com used the data it has collected to correctly predict investor reactions for approximately two-third of the stocks it's previewed.

In its latest earnings preview, BullMarket.com looks at several popular stocks still set to report results this week, including Kinder Morgan Energy (KMP), eBay (EBAY), Citigroup (NYSE:C), Intel (INTC), and Bank of America (BAC).

Here is just a tiny sample of what BullMarket.com wrote about eBay:

eBay has beaten analyst EPS estimates seven of the past eight quarters, meeting the consensus once. Over that stretch, the stock has risen the next session six of eight quarters. Seasonally, the stock has risen three times in the last four years. ...

Last quarter, the company said it earned $587 million, or 45 cents per share, versus $491 million, or 37 cents per share, a year earlier. Adjusted earnings rose 14% to $718 million, or 55 cents, from $628

million, or 48 cents, a year ago. This topped analyst expectations for EPS of 54 cents.

Revenue jumped 15% to $3.40 billion, in line with the consensus. Organically, revenue rose 18%.

The Marketplace business saw revenue rise 9%, or 13% excluding currency, to $1.81 billion. The Payments business saw revenue rise 23% (24% in constant currencies), to $1.37 billion.

eBay generated $1.2 billion in operating cash flow and $792 million in free cash flow during the quarter.

For the full year, eBay raised its guidance to adjusted EPS of $2.32-$2.35 on revenue of $13.95-$14.1 billion from EPS of $2.28-$2.33 on revenue of $13.8- $14.1 billion. Analysts were looking for EPS of $2.34 on revenue of $14.03 billion. ...

Outside of earnings, we continue to believe that eBay has some very bright long-term prospects. In a world where companies are trying to figure out how to monetize mobile, eBay is cashing in on the mobile movement.

Over the past few years, eBay has essentially transformed itself from an online auction website into a retail and payments technology and fulfillment company that can help retailers optimize their businesses both online and offline. Through innovation and acquisition, eBay is now at the cutting-edge of e-commerce technology. Some of the notable technologies that it has integrated into its X.commerce open ecosystem platform for retailers include Magento, which is an open-source e-commerce solution that allows merchants to customize both their online storefronts and the backend; Milo, which lets consumers search for inventory of local stores in real time; and RedLaser, which allows consumers to scan bar codes and comparison shop.

Together with the acquisition of GSI, these technological improvements have helped the company draw top retailers to use its site for closeout inventory, improving both its merchandise and the quality of its sellers.

PayPal, meanwhile, is a swiftly growing online payments business, but with its offline initiatives and move into the virtual wallet, its potential is even greater. ...

The full BullMarket.com earnings analysis includes a look at historical earnings data and EPS trends for the companies above and more; examines past investor reactions to earnings in various contexts; gives options activity analysis; reviews previous-quarter earnings; and gives an opinion on both what earnings will look like and how investors will react based on the aforementioned data points.

Just a few of the correct calls BullMarket.com made for Q3 were:

  • to be bullish on Facebook (FB) ahead of earnings.
  • to be bullish on Qualcomm (QCOM) ahead of earnings.
  • to be bearish on J.C. Penney (JCP) ahead of earnings.
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