Earnings History – Google and IBM 1Q2014

Next up on the earnings calendar we have two tech heavyweights. Interestingly enough, they are not quite competitors just yet, however they have more to offer each other than they probably let on. IBM can handle big data and Google can generate big data.

First let us look at how IBM behaves around earning announcements.

If IBM closes today at $197.10:

On average expect it to close between $188.10 and $205.60 by the end of the week.  If it goes according to the average, expect a $8.50 move in either direction by the end of the week.  Out of the past 14 times it has gone down in price 8 times.  If the largest change (up or down) over the past 14 earnings reports is repeated, expect a move more to the tune of $17.20 in either direction.

Now onto Google whose recent split has forced analysts to recalculate Earnings Per Share estimates since the number of shares has changed as a result of the recent split. You can read more about the split here.

If GOOG closes today at $544.31

On average expect it to close between $510.50 and $578.20 by the end of the week.  If it goes according to the average, expect a $33.80 move in either direction by the end of the week.  Out of the past 14 times it has gained 8 times.  If the largest change (up or down) over the past 14 earnings reports is repeated, expect a move more to the tune of $70.30 in either direction. Google and the SPY have shared direction 8 times out of the past 14 earnings reports.

At some stage these two companies will know everything about everybody and can trade markets more consistently than any high frequency trading algorithm can. But for now it is up to you to make your own decisions.

Good luck and trade rationally.

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