Earnings Previews: IBM, Kinder Morgan, Netflix, Tesla

Before U.S. markets opened on Tuesday, Bank of America beat consensus estimates on both the top and bottom lines. Profit rose by 20% year over year, and revenue was up more than 11%. Shares traded up 2.6% shortly after Tuesday’s opening bell.

Morgan Stanley also beat consensus estimates for quarterly revenue and earnings per share (EPS). Profits were lower year over year, but revenue rose by 2.3%. Shares traded up about 3.1%.

Bank of New York Mellon also topped revenue and EPS estimates. Revenue reached a record high, but investors did not approve of the decline in net interest margin. Shares traded up about 1.1% early in Tuesday’s regular session.

Charles Schwab touted its $180 billion in new assets and 1 million new accounts during the quarter, but revenue was down 8.6% year over year even though it beat expectations. EPS was also above estimates. The stock traded up about 12.6%.

Lockheed Martin also beat top-line and bottom-line estimates. The country’s largest defense contract raised fiscal year EPS and revenue guidance. Shares traded up 1.2%.

There are no notable earnings reports due after markets close on Tuesday. Early Wednesday morning, ASML, Baker Hughes, Goldman Sachs, Halliburton and U.S. Bancorp will report quarterly results.

After U.S. markets close on Wednesday, these four companies are expected to report quarterly results.


Shares of International Business Machines Corp. (NYSE: IBM) have slumped by about 4% over the past 12 months. Since the end of the first quarter, IBM’s stock has added about 5.5%, primarily due to a plan to fire some 8,000 workers and replace them with AI tools.

IBM’s hybrid cloud business, offering a bridge between private and public clouds through its Red Hat software, positions the venerable company well to keep paying a handsome dividend. CEO Arvind Krishna has done well so far to keep the company growing, and analysts expect IBM to continue growing at an annual rate of 3%.

Of 16 brokerages covering the stock, 10 have a Hold rating and four rate it at Buy or Strong Buy. At a recent price of around $134.00 a share, the implied upside based on a median price target of $140.00 is about 4.5%. At the high price target of $162.00, the implied upside is 20.9%.

Second-quarter revenue is expected to come in at $15.57 billion, which would be up 9.3% sequentially and essentially flat year over year. Adjusted EPS are forecast at $2.00, up 47.2% sequentially but down 13.4% year over year. The current full-year estimates call for EPS of $9.43, up 3.3%, on sales of $62.26 billion, up 2.9%.

IBM stock trades at 14.2 times expected 2023 EPS, 13.4 times estimated 2024 earnings of $10.03 and 12.8 times estimated 2025 earnings of $10.47 per share. Its 52-week trading range is $115.55 to $153.21. IBM pays an annual dividend of $6.64 (yield of 4.98%), and total shareholder return for the past 12 months was 0.87%.

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