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Sell Into this Surprise Earnings Beat

Thursday, 12 Jul 2012 | 1:54 PM ET

Following are Thursday's Pops & Drops.

Find out what’s going up, what’s going down and whether our traders would double down, fade or run in the other direction!

Texas Industries

The catalyst:Texas Industries surprised the Street with fourth quarter net income of $60 million or $2.15 per share; on average the Street expected a loss of $0.34 per share according to Thomson Reuters. It was the first time the company was profitable in 10 quarters.

The trade: If you’re in this name, take profits, says Mike Murphy, founder and managing partner at Rosecliff Capital. Earnings strength was due more to cost cutting than anything else.

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Autozone

The catalyst: Citi reiterated its Buy rating on Autozone and said the company is well positioned to benefit from improving trends in the auto parts sector following a "tough" June.

The trade: In the short-term, I think the stock wants to push higher, says Guy Adami, managing director of stockMONSTER.com.

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Yum!

The catalyst: In a move that surprised the Street, Yum Brands did not report second quarter earnings earlier in the week, triggering concerns about the impact China is having on the company’s bottom line.

The trade: Investors are selling on fears that China will be soft, says Pete Najarian, co-founder OptionMonster.com. But at these levels I’d take a look. Earnings I think will be on the 18th.

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Marriott

The catalyst: Although Marriott reported a higher quarterly profit the company also said it was seeing weakness in some international markets.

The trade: If you have an appetite for risk, I’m a buyer against $36. But use $36 as a stop, says trader Brian Kelly, founder of Shelter Harbor Capital.


Posted by CNBC's Lee Brodie

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Trader disclosure: On July 12, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Mike Murphy is long SBUX; Mike Murphy is long FB; Mike Murphy is long NAV CALLS; Mike Murphy is long CMI; Mike Murphy is long CHK; Mike Murphy is long CSX; Mike Murphy is long FDX; Brian Kelly is long TLY; Brian Kelly is long SPY PUTS; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long NUE; Guy Adami is long AGU; Guy Adami is long BTU; Guy Adami is long MSFT; Guy’s Wife works at Merck; Pete Najarian is long AAPL; Pete Najarian is long C; Pete Najarian is long JPM CALLS; Pete Najarian is long INTC; Pete Najarian is long SBUX; Pete Najarian is long FB; Pete Najarian is long MRK; Pete Najarian is long NSC

For Boris Schlossberg
Nothing to disclose

For Eric Jackson
Eric Jacson is long YHOO

For Rick Snyder
Nothing to disclose

For Marci Ryvicker
Wells Fargo Securities, LLC maintains a market in the common stock of DIS
Wells Fargo Securities, LLC maintains a market in the common stock of CMST
Wells Fargo Securities, LLC maintains a market in the common stock of TWC

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