Tuesday, August 15, 2006

DE - earnings

DE (Deere & Co.) announced earnings on 15 Aug 2006 before market opens. Revenue increased 5.7% to $5.68 bln year/year. Reported 3rd quarter EPS of $1.85 per share, $0.04 better than the Reuters consensus of $1.81.

When market opened on 15 Aug 2006, DE gapped down about $1 to $67.50 but went up quickly to close the gap. DE then went down to about $67 about 9.52am EST, but shot up to $69 at 10.16am EST. The stock went up to $69.83 by 10.35am EST.

If you bought a put option before earnings announcement, you might recover some of the premium if you sell between 9.40am EST and 9.50am EST. The stock has already dropped from $82 to $70 since mid July 2006. Thus, take note that buying a put for this earnings play might not see further downside.