Acme Packet (APKT) – Earnings Release Setup

Acme Packet Inc (APKT) is expected to report earnings on 5/2/2012 (after the close). The current consensus of the 22 analysts is a buy rating. Over the past four weeks analysts have increased their rating and have increased it over the past three months. For this analysts are expecting next quarter’s EPS and revenue of $0.21 per share and $75.72 million respectively. Looking out further, estimates are for EPS of $1.00 on sales of $336.11 million for the full year.

Option traders are pricing in the potential for a post earnings move of 9.40% – indicating a wide range of expected movement.

Acme Packet Inc is currently in a consolidation pattern, signified by its price moving between TriggerPoint support (Green Line) and TriggerPoint resistance (Red Line) – In other words, range-bound between $26.53 and $28.88 Technical indicators are currently showing us that prices are trending up, as signified by the stair stepping up of the point of control (blue line). As this security is trending higher, it may be a higher probability trade to look to buy on the TriggerPoint support levels (green lines) depending on the outcome of the earnings.

In terms of directional movement of the security and the earnings release, Acme Packet Inc shows a high degree of correlation in price action to surprises in both EPS & revenue.

The general setup is as follows: (see TriggerPoint Research for our ALERT! and Report explanations)

A miss could bring down the price dramatically as it has done in the past. We are looking to pick up a position for a “bounce” at $26.40 and 25.32. If there is a beat, the short cover squeeze could push this above a key resistance and we would consider a long position above $28.85.

The full report is here with all information on EPS and Revenue expectations : APKT Pre-Earnings Report