Advanced Micro Devices Inc (AMD)

[JLS]

AMD earnings ...

Last earnings report (for quarter ending 3-months ago) was estimated at $0.12 per share, and AMD produced $0.13. So they beat. What did the stock do?

Despite the beat, the stock declined significantly, from a previous day's close of $25.09 to $22.79 on the next day, then gapped lower to close at $19.27 on the following day, then to trade as low as $16.17 a few days later.

What I just described was a 35.6% decline on the previous earnings beat. Apparently the market thought the earnings were OK but it didn't like their forecast for the next quarter -- the one just ending.

This quarter's earnings was originally estimated to be $0.10, a decrease from the prior quarter, and yet it's earnings estimate has continued to move down to $0.09 and later to $0.08. That's a 20% downward revision of an already lower estimate compared to the previous quarter.

That's why I got out of AMD last Friday -- I sold Call options and shares were assigned.

Even if by some toss of the coin AMD trades higher immediately after their report tomorrow, I think there's a good chance it trades lower in the following days as there are lots of holders who will take profits and consider themselves as lucky.