IBM, eBay and Intel have investors rejoicing

IBM (NYSE: IBM) and eBay Inc. (NASDAQ: EBAY) reported their first quarterly earnings for 2008 after market close today, and Wall Street which was already in an upbeat mood from Intel's (NASDAQ: INTC) positive earnings report yesterday, rejoiced even further. IBM beat the quarterly earnings, and raised the 2008 guidance. IBM shares were up about 3% in after hours for a total daily gain of about 6%. IBM shares are already up 11.44% in 2008 (without counting after hours activity). eBay shares were also up today on the broad market rally, and are only down 3.22% for the year. eBay posted a solid 22 percent rise in quarterly net profit, topping Wall Street's average estimate, and importantly, cautiously raised its 2008 revenue target. Yesterday, Intel reported quarterly earning that beat the lowered estimates, and raised the second quarterly guidance. This was enough to start the tech rally today, that extended into optimism across the board. Intel shares were up nearly 6% today, and gained more in after hour trading. Intel shares are down 17% for the year though.

IBM, eBay and Intel are three of the Top 20 Innovators of The Innovation Index. Innovation Index Group has a BUY recommendation for these Innovators.

The Innovation Index closed today at 100.51, up 2.05 points.

In Future Earnings Guidance, I had talked about the importance of earnings guidance, and its impact on short term stock price. IBM had provided an upbeat guidance in January, 2008, and hence its stock began to appreciate after the quarterly report (although was down 14% early in the year). IBM has not only erased the entire negative performance, it is up 11.44% for the year.

Excerpts from various company press releases:

IBM (NYSE: IBM) announced first- quarter 2008 diluted earnings of $1.65 per share from continuing operations compared with diluted earnings of $1.21 per share in the first quarter of 2007, an increase of 36 percent as reported. First- quarter income from continuing operations was $2.3 billion compared with $1.8 billion in the first quarter of 2007, an increase of 26 percent. Total revenues for the first quarter of 2008 of $24.5 billion increased 11 percent (4 percent, adjusting for currency) from the first quarter of 2007.

"IBM had a very good quarter, and a good start to 2008. These results reinforce our confidence in IBM's ability to perform well in a dynamic global economy. ....," said Samuel J. Palmisano, IBM chairman, president and chief executive officer.

"IBM is a different company today, with a number of unique advantages: our global reach and scale, our strength in profitable growth segments, strong recurring revenue and profit streams, products and services that create real value for clients, and the discipline and financial strength and flexibility that enables us to adjust our business model as conditions require.

"We feel good about the rest of the year."

eBay Inc. (Nasdaq:EBAY) today reported financial results for its first quarter ended March 31, 2008. The ecommerce company posted first quarter revenue of $2.19 billion, up $424 million from the same period last year. Revenue growth was driven primarily by Marketplaces net transaction revenues, the ongoing expansion at PayPal, Skype and the company's global classifieds business. The company's global footprint helped it benefit from strength in other currencies, relative to the U.S. dollar. The company recorded net income on a GAAP basis of $460 million or $0.34 per diluted share, and non-GAAP net income of $562 million or $0.42 per diluted share.

"This was a very strong financial quarter for the company," said eBay Inc. President and CEO John Donahoe. "The results reflect the strength provided by our diverse portfolio of businesses. Our stability and growth continues to give us the confidence to make innovative changes to our products to keep customers engaged for years to come."

Intel Corporation yesterday announced record first-quarter revenue of $9.7 billion, operating income of $2.1 billion, net income of $1.4 billion and earnings per share (EPS) of 25 cents.

"Our first quarter results demonstrate a strengthening core business and a solid global market environment," said Paul Otellini, Intel president and CEO. "We saw healthy demand for our leading-edge processors and chipsets across all segments. Looking forward, we remain optimistic about our growth opportunities as we continue to reap the benefits of our 45nm technology leadership."

Bottomline:

IBM, eBay and Intel have definitely showed resiliency in current economic conditions; not only have they found a way to grow their business in these conditions, they have also raised their future financial outlook. This speaks volumes. This is what sets true innovators apart. IBM, eBay and Intel are able to sell their products, create new markets and new growth opportunities, and execute. Specifically, Intel has excelled with the 45nm technology leadership and the resulting processor products, eBay with Marketplaces business model innovation, and the ongoing expansion at PayPal, Skype and the company's global classifieds business, IBM with total Global Services revenues growth of 17% and the closed acquisition of Cognos growing the revenues for Information Management software by a significant 27 percent. IBM grew the total software segment revenue by 14% from last year.

IBM, eBay and Intel could quite possibly fuel a BULL market rally, and perhaps put the Bears to rest.

About Innovation Index Group:

Innovation Index Group, Inc. is a new investment management company focused on systematically identifying, tracking and investing in the most innovative publicly traded companies in North America – collectively called the Innovation Index. We have developed the Innovation Index Fund, LLC as our first vehicle to invest in the Innovation Index. Over the past six years, the Innovation Index has generated a gross average annual return of 40%.

Innovation Index Group, Inc. and Innovation Index Fund LLC are registered California Corporations, and member of the Irvine Chamber of Commerce in Orange County. Further, Innovation Index Fund LLC is a private placement investment partnership organized under the California state regulations.

The Innovation Index Reports:

Invest in The Innovation Index - Innovation Index Fund tracks The Innovation Index
The Innovation Index closes 2007 at 66% - 2007 Annual Report on the Innovation Index
Top 50 Innovative Companies in the world - 2007 Report on Top 50 Innovative Companies
Annual Report - Chapter One - Total Innovation Activity - 2006 Annual Report One
Annual Report - Chapter Two - The Top Innovator - 2006 Annual Report Two
Annual Report - Chapter Three - The Innovation Insights - 2006 Annual Report Insights
Innovation and Stock Performance Correlation - The Innovation Index and Stock Performance

About The Innovation Index

The Innovation Index introduced in December 2006 is a weighted stock price index of the top 20 Innovators in North America.

The Innovation Index returned 66% in 2007, and returned 174% over the previous five years (2002-2006). This assumes equal investment in each stock of The Innovation Index as of December 31, 2001. An average of $100 invested in The Innovation Index on December 31, 2001 returned $454 as of December 31, 2007. By comparison, $100 invested in S & P 500 returned 28% or $129, $100 invested in NASDAQ returned 34% or $136, and $100 invested in the Dow Jones Index returned 30% or $131 through December 31, 2007. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by more than seven times over the past six years.*

Alphabetical list of the Top 20 Innovators of The Innovation Index for 2008 and their stock ticker symbols:

3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movil - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
AT&T Inc. - (NYSE: T)
Best Buy Co., Inc. - (NYSE: BBY)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Costco Wholesale Corporation - (NASDAQ: COST)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Merck & Co., Inc. - (NYSE: MRK)
McDonald's Corporation (NYSE: MCD)
Microsoft Corporation - (NASDAQ: MSFT)
NIKE, Inc. - (NYSE: NKE)
Research In Motion Limited - (NASDAQ: RIMM)
The Proctor & Gamble Company - (NYSE: PG)

The Innovation Index will analyze the positions and standings of the Top 20 Innovators at the end of each year. For 2008, there will be no further changes in The Innovation Index.

Disclaimer: The Innovation Index Group, Inc. invests in the stocks comprising The Innovation Index.
*Past Performance Does Not Guarantee Future Results