This morning Bank of America reported earnings with a beat: 19 cents per share on lower than expected revenue. Notable earnings after today’s close will be from American Express, IBM, Qualcom, and Yum! Brands.
This will be the first quarter that IBM will report earnings with combined results from former Motorola Mobility Holdings Inc. IBM currently derives most of its revenue from outside the US, leading analysts to trim estimates after slowdowns in the BRICS countries. This quarter IBM launched a new initiative dubbed IBM PureSystems, and merges all IBM software and hardware for the user and runs alongside whatever systems were used before. This part of IBM’s recent strategy to move into the growing market for data management and analytics. Analysts are expecting IBM to post a net income of $3.98 billon or $3.42 per share, a 3% gain year over year.
A stock to watch today is Google, which will be reporting earnings after the close on Thursday. The stock routinely moves 5-10% after earnings, making it a popular stock among options traders. As trader’s place their bets on the stock the front month, at-the-money straddle will reveal how much they expect the stock to move. Currently the July 575 straddle trades for $34.80 with an implied volatility of 82%. Following the earnings release, the implied volatility in these options will collapse back to normal levels. Earnings of $10.11 per share on revenue of $8.43 billion are expected.