Dear Bottarelli Research Member,
Good morning. Let’s get right into our two earnings releases…
On the positive side, hard-drive maker Western Digital (WDC – NYSE) posted a sharp increase in its fiscal second-quarter profit, earning $429 million ($1.85 per share), which was way up from the $14 million ($0.06 per share) they earned in the same period one year ago. These results easily beat the Thomson Reuters estimates of $1.36 per share.
In pre-market trading, shares of WDC are lower by $0.40, which seems odd coming off a sparkling report like this. As a reminder, we entered the basket of WDC February 43 Puts (FJI NQ) and WDC February 46 Calls (FJI BT) for a total of $3.00. Let’s see how it trades, and we’ll go from there.
In contrast to this positive announcement, Harley-Davidson (HOG – NYSE) reported a rather large fourth-quarter loss – their first quarterly deficit in 16 years! The motorcycle maker lost $218.7 million ($0.94 per share) versus a profit of $77.8 million ($0.34 per share) one year ago. Since Thomson Reuters expected a loss of $0.32, this was a very large miss. In pre-market trading, HOG is down a little, which seems muted after laying such an egg. We entered the basket of HOG February 25 Calls (HOG BR) and HOG February 24 Puts (JOZ NH) for $2.10. Depending on how the open goes, we’ll see if we need to cut the calls loose and rids the puts. More to come. Until then…
Lock and load!