Options traders were call-heavy on SLB ahead of earnings
U.S. stocks are trading higher this morning after the Senate passed a budget proposal, moving one step closer to tax reform in the process. Among the stocks making moves this morning are industrial conglomerate General Electric Company (NYSE:GE), oil services specialist Schlumberger Limited. (NYSE:SLB), and Taser parent Axon Enterprise, Inc.(NASDAQ:AAXN). Here's a closer look at what's moving shares of GE, SLB, and AAXN.
GE Earnings Miss Sends Shares Further South
Shares of General Electric are continuing their recent decline after the company fell short of third-quarter profit expectations, and simultaneously trimmed its full-year earnings guidance. CEO John Flannery stated that investors can expect a "sweeping change" under his leadership, adding that GE's results are "unacceptable."
Meanwhile, analysts at both J.P. Morgan and Morgan Stanley have warned that GE may need to cut its dividend to combat shrinking cash flow, even as Flannery described the quarterly payout as "a priority" in today's earnings call. At last check, GE was trading down 3.1% at $22.88, and earlier fell as low as $22.11 -- a fresh two-year low for the blue chip.
Options traders were leaning towards the bears' camp ahead of GE's earnings, with data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) showing GE's 10-day put/call volume ratio of 1.33 arriving in the 98th percentile of its annual range. This suggests puts have been bought to open over calls at a near-peak pace during the past two weeks.
Schlumberger Tanks After Earnings
SLB reported third-quarter earnings that matched estimates, but the stock has tumbled 3.9% to $61.98 over concerns about a slowdown in the domestic oil services sector. Schlumberger shares earlier traded as low as $61.40, in territory not explored since January 2016.
Despite its 26% year-to-date drop, SLB options traders have remained optimistic. At the ISE, CBOE, and PHLX, Schlumberger's 10-day call/put volume ratio of 2.72 ranks in the 91st percentile of its annual range, suggesting a heavy preference of calls over puts during the past two weeks.
Axon Enterprise Gaps Lower Amid SEC Review
Axon Enterprise is trading lower after the company revealed late Thursday that the U.S. Securities and Exchange Commission (SEC) is reviewing their financial filings -- and apparently, AAXN officials managed to miss the SEC's first several requests, with the initial letter dated Aug. 10. At last check, Axon stock was trading down 5.9% at $23.17, having gapped below recent support at its 20-day and 80-day moving averages at the open.
Shorts are likely pleased by the drastic sell-off in AAXN today. As of the most recent reporting period, bears had sold short no less than 33.7% of the stock's float -- a hefty accumulation that represents 35 times the equity's average daily trading volume.