International Business Machines Corporation (IBM) plans to release its third quarter financial results after the market closes on Wednesday, October 16, 2013. Management will host a conference call/webcast at 4:30 PM ET to discuss the results and current market conditions.
Wall Street anticipates that IBM will earn $3.96 for the quarter. iStock expects the Dow Jones Index member to beat Wall Street's consensus number. The iEstimate is $3.98, a two-penny upside surprise.
International Business Machines Corporation provides information technology (IT) products and services worldwide. IBM operates in four segments - Global Technology Services, Global Business Services, Software and Systems and Technology.
Investors should be used to EPS that outpaced Wall Street's consensus as big-blue produced bullish surprises 14 of the last 16 quarterly checkups; however, the surprises have hugged analysts' outlook. On average, IBM profits-per-share topped the mark by $0.08, which works out to 2.38%.
The blue-chip tech missed just once in the last four years by -$0.06 and tied the consensus outlook the remaining announcement.
Despite IBM's great EPS success, shareholders haven't fared as well in the three days surrounding the news. Investors reacted redly nine times with losses ranging from -0.40% to -8.40% with and average loss of 3.88%.
That means investors were a bit luckier for the remaining seven announcements. The stock gained anywhere from 1.1% to 7.10%. The typical move was 4.17% higher.
A $10,000 investment three days before the last 16 earnings announcement would have resulted in a $570 loss by selling three days after the news. The numbers say it's a losing proposition.
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Let's take a deeper look to see if we can identify any other trends to help us determine which side of the tape Wall Street is likely to take. DING, DING, DING… we may have found a winner.
Although IBM has delivered three bullish surprises and the above-mentioned tie for the last four October EPS announcements, the stock fell every time; from -0.4% to -6% with an average loss of 3.63%. Trading $10k for October earnings would have lost you $1,450, three days prior/afterwards we previously outlined.
While we do not like October's performance, we didn't find anything too concerning in IMB's second quarter 10-Q. With the exception of selling, general and administrative, costs dropped faster than sales, but inventory did bump up a touch; just not enough to concern iStock, yet.
Overall: International Business Machines Corporation (IBM) recent October earnings driven share price performance would dissuade us from jumping in front of Wednesday's news.
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