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 Among the numerous tech companies releasing earnings next week are
International Business Machines, Microsoft Corp and Apple, all of
which are expected to show growth.
Wall Street analysts expect earnings of the S&P technology sector to
grow by 2.7 percent for the second quarter.
So far, big-name tech companies have provided the two biggest
reactions from investors in this reporting season. After Netflix
reported stronger-than-expected subscriber growth on Wednesday, its
shares increased 18 percent, while Google's results triggered the
biggest one-day move in the stock in more than seven years, as
shares surpassed $700 for the first time ever.
“Right now, investors are looking for growth and tech is one of the
sectors where growth may not be as great as they want, but it’s
there year-after-year,” said Dan Morgan, vice president at Synovius
Trust Company in Atlanta.
Investors will be looking closely at each major tech company’s
latest innovations to see if new platforms and tools have the
potential to drive long-term growth.
IBM will open the week with its second-quarter earnings on Monday.
The company’s recent analytics tools and cloud platform will be
under investors' microscopes, to see if these segments can generate
more revenue. IBM's shares have struggled of late, with the stock
down more than 10 percent in the last 12 months, compared with an
8.6 percent gain in the S&P 500.
Apple and Microsoft will both release their figures on Tuesday.
Investors are confident that Apple's iPhone will continue to rake in
profits, but analysts will be watching for the first official
figures on the Apple Watch. Some investors are looking to see if the
watch can make up for lower growth of the iPad, which has faced
numerous tablet competitors.
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Yahoo Inc, Qualcomm Inc and Texas Instruments Inc will also report
earnings next week.
In addition to tech companies, a host of banks including Morgan
Stanley will report earnings next week, following results this week
from many financial companies in the S&P 500, including Bank of
America Corp, Citigroup and Goldman Sachs Group Inc.
Financials have been inconsistent. Bank of America exceeded
expectations and Citigroup reported its largest quarterly profit
since the financial crisis, while Goldman Sachs reported its
smallest quarterly profit in nearly four years due to litigation
expenses.
Analysts expect earnings of the S&P financials sector to grow by
19.1 percent this quarter, the best year-over-year growth of any
sector.
(Reporting by Tariro Mzezewa; Editing by Leslie Adler)
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