ETFs In Focus After IBM's Q3 Earnings

After the closing bell on Oct 16, International Business Machines (IBM - Free Report) reported mixed third-quarter 2019 results.

Earnings per share came in at $2.68, surpassing the Zacks Consensus Estimate of $2.64 and the year-ago earnings of $3.42. Revenues fell 3.9% year over year to $18.03 billion, marking the fifth consecutive quarter of sales decline. It missed the consensus estimate of $18.24 billion.

Investors were disappointed with respect to IBM’s $34 billion Red Hat acquisition completed in July that did not meet their expectations. Red Hat revenues are unlikely to turn around the fortunes of the company after years of revenue decline amid shift to cloud from its traditional businesses, including mainframe servers. However, the company said it expects sustainable revenue growth in 2020 after more than a year of decline.

The world’s largest computer-services provider reiterated its full-year earnings projection of “at least $12.80” a share.

Shares of IBM tumbled more than 5% in after-market hours. The stock has a Zacks Rank #3 (Hold) and boasts a top Value Score of A. It also belongs to a top-ranked Zacks industry (top 33%).

ETFs to Watch

Given this, ETFs with the highest allocation to this tech giant will be in focus. Investors should closely monitor the movement of these funds and grab the opportunity whenever it arises or avoid if the stock weighs them down in the days ahead.

First Trust NASDAQ Technology Dividend Index Fund (TDIV - Free Report)

This fund provides exposure to dividend payers within the technology sector by tracking the Nasdaq Technology Dividend Index. The product has amassed about $1 billion in its asset base while trading in volume of around 86,000 shares per day. It charges 50 bps in annual fees and holds about 93 securities in its basket. Of these firms, IBM takes the third spot, making up roughly 8.2% of the assets.

Invesco Dow Jones Industrial Average Dividend ETF (DJD - Free Report)

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Disclosure: contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any specific ...

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