Earnings Previews for Google and IBM

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After the close on Tuesday we will get to see tech-kings like Google Inc. (NASDAQ: GOOG) and International Business Machines Corp. (NYSE: IBM) report their fourth-quarter earnings. For IT-spending, IBM will be watched closely. IBM is also not just a Dow Jones Industrial component. It is THE top DJIA component due to its high share price creating an 11% weighting, which is more than three-times the normal weighting. All Internet investors will be watching to see what search king Google has to say.

Google Inc. (NASDAQ: GOOG) — $10.52 EPS and $12.36 billion in revenue; next quarter estimates are $10.61 EPS and $12.12 billion in revenue.

The first Internet giant is on deck, and the stock remains about 10% off of its highs. Look for this to be the benchmark for online ad marketing dollars for Facebook, Yahoo!, AOL and others. With shares back under $700, the 52-week trading range is $556.52 to $774.38 and the consensus target is almost $800 on the king of Internet search. Extra data as follows:

  • As a reminder, Google revenue is an ex-TAC report rather than a gross revenue.
  • Stock chart is at key 50-day moving average test at $697.58, and the 200-day moving average is lower at $656.68. Google is in a downtrend and shares have been down almost seven days now.
  • Analysts expect a move of up to $29 in either direction.
  • Whispernumber.com is calling for $10.89 EPS.
  • Google offers no guidance.

International Business Machines Corp. (NYSE: IBM) — $5.25 EPS and $ 29.09 billion in revenue; next quarter estimates are $3.30 EPS and $24.72 billion in revenue.

This DJIA component has lagged as a DJIA stock, although the IT-spending market lag that has been seen should start to abate in 2013. The stock is still almost 10% less than its highs, and the $195 price of today compares to a 52-week range of $181.85 to $211.79, and compares to a consensus target of $222.23 on the stock. Extra data as follows:

  • Stock chart at critical point: the 200-day moving average is just above price now at $195.73, and the 50-day moving average is just under price now at $191.84.
  • Options pricing was not active, but best estimate is options traders priced in a move of up to $6 in either direction.
  • Whispernumber.com is calling for $5.35 EPS.
  • Long-term, IBM keeps saying earnings of at least $20 EPS by 2015.
  • IBM services backlog rose to $138 billion last quarter from $136 billion in the prior quarter.
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