The Zacks Analyst Blog Highlights: Google, IBM, Intel, Ford and Capital One Financial

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Jul 18, 2014, 09:30 ET

CHICAGO, July 18, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Google (Nasdaq:GOOGL-Free Report), IBM (NYSE:IBM-Free Report), Intel (Nasdaq:INTC-Free Report), Ford (NYSE:F-Free Report) and Capital One Financial (NYSE:COF-Free Report).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Thursday's Analyst Blog:

IBM, Google Report Solid Q2 Revenues

Two tech titans -- Google (Nasdaq:GOOGL-Free Report) and IBM (NYSE:IBM-Free Report) -- reported Q2 earnings after the bell on Thursday, with mostly positive results for both companies: IBM posted earnings of $4.32 per share on revenues of $24.4 billion in the quarter; Google's earnings (including traffic acquisition costs, or TAC) reached $5.09 in the quarter on revenues of $15.96 billion.

Google's sales number in particular stands out as a big positive; the Zacks consensus expected quarterly revenues in the $12.4 billion range, and year over year Google's sales jumped 22%. The company missed yet again on the bottom-line, however -- we had expected $5.16 per share (accounting for TAC). Whereas IBM beat earnings by a penny, it also managed to bring in revenues a couple hundred million dollars higher than anticipated. This is important for followers of IBM, who were by now conscious of a long string of revenue estimate misses, going back 8 quarters.

While most of IBM's expansive business sectors were in-line with expectations, hardware sales hit $3.3 billion in the quarter, which was better than anticipated. We should get more articulation during the conference call, but it's possibleIntel's (Nasdaq:INTC-Free Report) narrative earlier in the week about stronger enterprise spending on tech hardware may be showing its effects here.

Google's most closely-followed metrics were again decent-to-good, with paid clicks up 25% and cost-per-click a better-than-expected -6%. Its TAC percentages of ad revenues are still costly, but fell 2% year over year in the quarter. However, a couple big moves on Google's board recently may signify a shift for the company beyond the tea leaves from its Q2 earnings report:

Following the addition of former Ford (NYSE:F-Free Report) CEO Alan Mullaly to Google's board of directors earlier this week, Google after the bell today announced Chief Business Officer Nikesh Arora will be stepping down after 10 years with the company. Arora is reportedly headed to SoftBank. This could amount to a changing of the guard in Google's focus; time will tell.

Neither stock is doing much particularly noteworthy after the bell: Google has made back roughly the full point and a half it lost in regular Thursday trading, and after an initial spike up in after-hours trading, shares have traded down more than a point. But as this is a very irregular news day -- a Malaysian commercial airliner crashes in the Ukraine and Israel sends soldiers into Gaza -- we don't expect earnings news to eclipse anything today.

Capital One Earnings Beat on Credit and Loan Growth

Capital One Financial (NYSE:COF-Free Report) reported earnings after the bell, posting an EPS of $2.04 and Revenues of $5.47 billion. This was a solid beat of the Zacks Consensus Earnings Estimate of $1.79, and came in ahead of the Zacks Consensus Revenue Estimate of $5.431 billion.

Over the past month, analysts have been upgrading their estimates of COF due to growing consumer confidence, and better credit and loan growth. In the past thirty days, estimates have risen across the board; Q2, up from $1.77 to $1.79, Q3 up from $1.82 to $1.84, and for the full year, up from $7.19 to $7.27.

Another positive for the company is the value they are returning to their shareholders. After the repurchase of $1 billion in common shares in 2013, management announced, in March, the plans to utilize another $2.5 billion for share repurchases in 2014. Add that with an improving dividend, currently yielding 1.42%, and you have both analysts and investors being highly positive with this stock.

Further, the recent partnership with Kohl's has help bolster their future growth prospects as well. In May, COF announced a multiyear deal with Kohl's to continue their private label credit card agreement. This was an area of concern with the street due to the misperception that COF's private label division was weakening. This should expel those notions.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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