22-04-2025
How To Trade IBM Stock Ahead of Its Earnings?
20 March 2025, Bavaria, Munich: The IBM logo at the headquarters of IBM Germany in the Highlight ... More Towers in Parkstadt Schwabing in Munich (Bavaria). Photo: Matthias Balk/dpa (Photo by Matthias Balk/picture alliance via Getty Images)
International Business Machines is set to announce its earnings on Wednesday, April 23, 2025. Historical trends indicate that the stock often responds positively to earnings releases. Over the last five years, IBM has delivered positive one-day returns in 60% of earnings announcements, with a median gain of 4.8% and a maximum single-day jump of 13%.
For event-driven traders, analyzing these historical trends may offer an edge, though actual stock movement will ultimately depend on how results align with market expectations and analyst estimates. Two primary trading strategies emerge:
IBM currently commands a market capitalization of $221 billion. Over the trailing twelve months, the company has posted $63 billion in revenue, with $10 billion in operating profit and $6.0 billion in net income.
Consensus projections for the upcoming earnings call for earnings per share of $1.43 on revenue of $14.4 billion. This is a decline compared to the $1.68 EPS and $14.5 billion in sales from the same quarter last year, which had included a one-time gain from the sale of the Weather Company.
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See earnings reaction history of all stocks
Key insights on one-day (1D) returns after earnings:
Further details for 5-day (5D) and 21-day (21D) post-earnings returns are available in the table below.
IBM observed 1D, 5D, and 21D returns post earnings
A more conservative trading strategy—assuming a strong correlation exists—is to assess how short-term post-earnings movements align with medium-term outcomes. If, for instance, 1D and 5D returns exhibit the highest correlation, a trader could adopt a 'long' position for the next 5 days following a positive 1D return. Below is correlation data based on both 5-year and 3-year records. Note that 1D_5D denotes the relationship between the 1-day and 5-day post-earnings returns.
IBM Correlation Between 1D, 5D and 21D Historical Returns
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