History Shows Shorts Likely to Knock Texas Instruments Lower

Shares of Texas Instruments (TXN) are lower despite issuing Q1 guidance in a range that straddles consensus estimates. In heavy after hours trading Monday, the stock has fallen 2.5%. History indicates additional losses are likely today.

TXN gives an edge to wider next-day share moves following evening earnings releases. It has widened 13 times, narrowed 11, turned in one flat performance, and once ended even with its evening move in next-day trade over the 26 quarters we've tracked. The near-term pattern has recently changed and the stock has narrowed its move in three of the last four quarters, following a long nearly uninterrupted streak of widening moves.

Looking deeper into the data, shorts take notice: the stock has declined in 11 after-hours sessions, and headed deeper in the red the next day eight times - adding to its downside 73% of the time it records an earnings-driven after-hours decline within our database. The stock has recorded an after-hours gain in 15 of the quarters we've tracked, adding to its gains the next day in 5 quarters (33% of the time).

On Oct. 25, 2010, TXN declined 1% in evening trade after topping Q3 estimates and setting its Q4 guidance in a range that straddled the Street view. The stock cut its downside the following day, closing the Oct. 26 regular session off 0.3%.

On July 19, 2010, TXN declined 5.6% in after-hours action after beating EPS estimates, missing revenue estimates, and setting guidance in line with expectations. The stock cut its downside the following day, ending down 3%.

On April 26, 2010, TXN edged up 1.3% in evening trade after reporting better-than-expected results and guidance. The stock lost its upside the following day, closing the April 27 regular session down 2.2%.

On Jan. 25, 2010, TXN slipped 1.4% in after-hours trade despite reporting better-than-expected results and guidance. The stock closed the Jan. 26 regular session with the same 1.4% decline.

On Oct. 19, 2009, the stock advanced 2.9% during evening extended-hours following a quarterly beat and positive guidance. Shares were up a slim 0.6% the next day.

On April 20, 2009, TXN advanced 3% in after-hours trade after beating expectations and setting its guidance mostly above the Street view. It lost the gain the following day, ending the April 21 regular session down 1.2%.

On Jan. 26, 2009, shares were up 4.9% after a Q4 earnings beat and news of more job cuts. The gain was reduced somewhat the next day when shares closed up 3.6%.

On Oct. 20, 2008, the stock fell 5.6% after TXN earnings missed by a penny and guidance was below the Street view. The loss expanded to 6.3% the next day.

On July 21, 2008, the stock fell 12.1% after TXN missed with Q2 results and guidance. The loss expanded to 14% the next day.

On April 21, 2008, TXN declined 2.2% in evening trade after issuing guidance that could miss the Street view. It tumbled 5.8% by the close on April 22.

On Jan. 22, 2008, TXN firmed 3.1% in evening action after topping Q4 estimates and setting its Q1 guidance in line with the Street view. The stock added to its upside in the following Jan. 23 regular session, gaining 4.5% by the close.

On Oct. 22, 2007, TXN declined 4% in after-hours trade after the company met expectations but issued sales guidance below forecasts. It added to its downside in the Oct. 23 regular session, losing 8.3%.

On July 23, 2007, TXN slipped 3.4% in night trade after reporting Q2 EPS in line with estimates but missing on sales. Shares eased a bit further the next day to end the regular session down 4.5%.

On April 23, 2007, the stock was up 9.7% in the evening hours after the company reported ahead of the Street with Q1 results and guided mostly above. The gain was pared slightly, to 7.7%, the next day.

On Jan. 22, 2007, shares were up 2.3% after results topped the year-ago period and despite guidance below the Street view. The stock gained 3.5% the next day.

On Oct. 23, 2006, TXN slipped 1.1% in after-hours trade after the company reported mostly in-line to better-than-expected results but also issued sales and earnings guidance mostly below the Street view. The decline grew more aggressive the next day, with TXN closing the Oct. 24 regular session down 4.2%.

On the evening of July 24, 2006, the stock gained 3.6% after the company reported ahead of the Street with Q2 results and offered guidance that straddles the Street's view. The gain improved slightly, to 4%, the next day.

On April 18, 2006, TXN rose 3.2% in after-hours trade when the company topped Q1 estimates and guided for higher-than-expected Q2 earnings. The shares lost steam though and ended the following day?s regular session up 1.3%.

On Jan. 23, 2006, shares fell 1.9% after the company reported revenue and earnings short of the FC mean. The decline stretched to 3.1% the next day.

On Oct. 24, 2005, TXN declined 4.2% in evening trade after the company reported better-than-expected results but set its sales forecast in a disappointing range. TXN ended the Oct. 25 regular session down a deeper 7.6%.

On July 25, 2005, TXN ended the night session up 5.5% after the company topped Q2 estimates and guided for Q3 to be in line with expectations. The stock held those gains to close the next day session up the same amount, up 5.5%.

On April 18, 2005 TXN advanced 5.9% in night trade after the company posted better-than-expected results and guided in-line to better than the then current Street view. It reduced that upside slightly on April 19, closing bell-to-bell trade up 5.5%.

Back on the night of Jan. 25, 2005, TXN added 2% in after-hours trade after the company beat expectations and guided in-line to slightly lower than the Street view. The issue added to its upside on Jan. 26, closing the regular session up a bullish 7.3%.

TXN jumped 5.7% in night trade back on Oct. 18, 2004, reporting better-than-expected results and in-line guidance. It closed the Oct. 19 regular session up 6.9%.

Before the Oct. 18-19 event, TXN had been holding to a pattern of seeing its extended-hours gains or declines pared back in next-day trade.

TXN scored a 2.5% advance the night of July 20, 2004, after the company reported in-line results but issued guidance that could miss estimates. The stock turned sharply lower in the July 21 regular session, declining 5.1% by the closing bell.

On April 19, 2004, TXN added 1% in night trade after beating revenue expectations and guiding higher. The stock tumbled 2.3% by the end of the next day's regular session.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.