Earnings Preview: Shuffle Master (SHFL)

Shuffle Master, Inc. (NASDAQ: SHFL) is currently higher on the session by 2.30%, trading at $8.48. The company is scheduled to report earnings today, after the bell.

• Estimates

The Street is looking for Q3 earnings per share of $0.12 on revenue of $49.69 million. These estimates have risen by $0.01 (+9.09%) over the past 90 days. The Whisper number for SHFL is $0.12.

• Guidance

The Street is looking for Q4 EPS of $0.12 on revenue of $52.81 million. The full year 2010 estimates are $0.44 per share on revenue of $191.39 million; FY 2011 is at $0.52 per share on revenues of $205.99 million.

• Technical Picture

SHFL has been in a consolidation channel for the past nine months, with $7.50 support to the downside and $9.50 resistance on the topside. In the short-term that range has been narrowing and gyrating around the 50-day moving average. A stock with this pattern will break sharply in one direction or another on high volume given a strong catalyst.

• Volatility

Both historical volatility and implied volatility have been moderately down-trending over the past few months after a spike higher in mid-May. Currently HI is at 58% and IV is at 56%. The front month $7.50/9.00 strangle is trading at 84.41%; the October $8.00/9.00 strangle is trading at 58.77% Vol is skewing to the put side in both months.

Shuffle Master, Inc. is engaged in developing, manufacturing and marketing technology and entertainment-based products for the gaming industry for placement on the casino floor. It specializes in providing casino and other gaming customers with products and services.

The company has four product segments: utility, proprietary table games, electronic table systems and electronic gaming machines. Each segment's activities include the design, development, acquisition, manufacturing, marketing, distribution, installation and servicing of a distinct product line. Its subsidiaries include Stargames Limited and Shuffle Master Asia Limited.