Preparing for Q2 earnings on 8/1

CNIT will be reporting Q2 earnings next Monday on August 10 (updated). The consensus estimates calls for earnings of $0.17 per share.

(click for a closer look; this chart courtesy of TD Ameritrade)

I took a look at past earnings to see what the response was each day (and +1 day). I looked at everything fromt FY08 Q2 to FY11 Q1 (12 periods) and here's what I found:

• CNIT has beaten the street on a Q2 earnings release 100% of the time in the past 3 fiscal years, beating by an average of 13.44%
• CNIT beat estimates 9 out of 12 times, and the average beat was 13.67%
• CNIT failed to meet estimates 3 out of 12 times, and the average miss was -14.39%
• Only 4 out of 12 times did the stock close higher on the day of the earnings release, gaining an average of 2.61%
• The stock closed lower on the day of earnings 7 out of 12 times, losing an average of -10.05%
• The stock closed at the same price 1 out of 12 times (FY08 Q2)
• On the day after earnings, the stock closed higher than on the close of the day before earnings 4 times, gaining an average of 3.59%
• On the day after earnings, the stock closed lower than on the close of the day before earnings 8 times, losing an average of -7.15%
• In the last 4 earnings releases, the stock ended up down each time, despite beating estimates 3 out of 4 times
• Volume has consistently been quite high during the day of earnings (+/-1), with generally 2-4x the # of shares traded than the average for the period
• The HOD on the day of earnings is an average 6% above the close on the day before earnings, and has only been below the previous day's close 3 out of 12 times; this indicates there might be an opportunity to sell at a high before an eventual general sell-off occurs

The data, as you can see, isn't particularly rosy. Despite being generally pretty good about beating the street, CNIT has frequently taken a beating during and after earnings. Note also, however, that this year's estimates call for a decline in EPS YoY ($0.19 last year vs. estimates of $0.17 this year). In addition, CNIT indicated in this 7/15 press release that they had secured new contract wins of over $30.4M in Q2 2011, adding that they had experienced "some weakness in terms of signing new contracts...".