Tech Earnings Trifecta: IBM, Intel, Yahoo! (IBM, INTC, YHOO)

It used to be that banks all grouped their earnings around each other.  We’ve already started seeing some of the big earnings come out, but today we have a major day from technology giants and this could actually set the tone for much of the technology sector.  IBM, Intel, and Yahoo! are all set to report.  Here are the previews:

IBM (NYSE:IBM): $1.67 EPS & $24.07 Billion in revenues; next quarter $2.60 EPS & $27.7 Billion in revenues.  Big Blue is seeing shares actually under 3% of its multi-year highs and analysts have roughly a $125.00 target.  Options may not be indicative as a prediction tool because on calculation showed only a $1.25 expected move and one calculation showed traders appear to be braced for almost a $4.00 move.  The one number we hone in on for the future is Big Blue’s backlog, which it listed last quarter up $7 Billion from Q2 2006 as being $116 Billion.  It is not expected that IBM will have made major share buybacks in the compared to Q2.

Intel (NASDAQ:INTC): $0.19 EPS & revenues $8.52 Billion; next quarter $0.27 EPS & revenues $9.30 Billion.  The processor giant has an average target from analysts north of $29.00 and analysts appear to be braced for shares to move up to 2.5% in either direction.  Intel shares are also within about 3% of 52-week highs, and are up almost 40% from the 52-week lows.  Analysts will likely be focusing on that 51% to 52% gross margin reading to see if the AMD price wars are still biting its heels.

Yahoo! Inc. (NASDAQ:YHOO): $0.08 EPS & $1.24 Billion revenues (ex-TAC).  Remember, the headline revenue number will appear considerably higher because of traffic acquisition costs (TAC). Next quarter guidance $0.12 EPS & $1.37 Billion revenues.  This is Yahoo’s first full quarter under Jerry Yang and this will be the first full quarter we really get to peer inside the new Panama ad platform as to how it is trickling down into the company results.  At $27.00, and even though it is 20% off lows, Yahoo! has spent two-years as dead money while Google has been stealing market share.  Yahoo! has to find more ways to capitalize on its 400+ million registered users.  Analysts have an average buy target of $30.00 to $31.00, although the number of positive analysts has fallen over the last year.

As a reminder, any of these estimates could have changed at the last minute because of revisions or changes in sentiment.

Jon C. Ogg
October 16, 2007