MidnightTrader Earnings Play: Healthways

Brooks McFeely is widely regarded as the leading expert on extended-hours trading. He is a Managing Partner for Brochet Capital Partners, LP and the founder of Midnight Trader, Inc. (midnighttrader.com), the leading provider of pre-market and after-hours trading analysis and news to retail and institutional investors.

Healthways (HWAY | Quote | Chart | News | PowerRating) is due with its Q3 results after the bell tonight. The Thomson Financial mean is for $0.39 per share in earnings. Sales are expected at $185.5 million.

The stock is one to watch for its very near term tendency to reverse direction. The issue has put up back-to-back quarters in which it reversed its extended-hours post-earnings move during the following regular session. Over the longer term, the stock gives a slight nod to widening its share move in regular trading following an evening earnings release, doing so in five quarters compared to four quarters for a narrowing or reversed move.

On March 18, 2008, the stock fell 4.6% after HWAY missed with revenue and offered mixed guidance. Shares gained 2.7% the next day.

On Dec. 19, 2007, the stock fell 3.6% after reporting shy with Q1 revenues. The stock rebounded to gain 8% the next day.

On Oct. 17, 2007, HWAY gained 3.2% in evening trading after reporting a sales miss but topping with EPS and guiding in line. The gain swelled to 8.1% the next day.

On July 5, 2007, the stock fell 4.4% after reporting a sales miss and guiding for FY results to miss. The loss widened to 6% the next day.

On April 4, 2007, HWAY fell 3% after reporting a sales miss but EPS in line. The loss widened slightly, to 3.7% the next day.

On Jan. 4, 2007, shares fell 5.4% in the evening hours after the company reported a Q1 sales miss though beat with EPS and guided mostly higher. The stock fell 2.3% the next day.

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