The IT giant, which releases its numbers after market close, often sets the tone for tech earnings season, as evidenced by the company's last quarter when IBM cited strength in emerging markets and enterprise software.
|IBM reports its first-quarter results after market close on Tuesday.|
With software giant Microsoft (MSFT), chip makers AMD (AMD) and Qualcomm (QCOM) and storage giant EMC (EMC) all on deck to report results this week, tech investors will be closely monitoring IBM's numbers.
Software, in particular, looks set to be another big growth driver for IBM. "Based on our supply chain checks, we anticipate in-line revenue and a beat on EPS, driven by software and share gains in high-end servers, offset by mixed trends in services," explained Shaw Wu, an analyst at Sterne Agee, in a note. "For its outlook, we anticipate the company to modestly raise its previous view of at least $14.85 in EPS for 2012."Credit Suisse (CS) also predicted a solid quarter from the tech giant in a note released this week, and raised its IBM price target. Analysts surveyed by Thomson Reuters expect IBM to report first-quarter revenue of $24.77 billion and earnings of $2.65 a share, up from $24.6 billion and earnings of $2.41 a share in the same period last year. Sterne Agee's Wu expects that IBM's software business, which accounts for 23% of its total revenue, to be boosted by its business analytics, enterprise cloud, and Smarter Planet initiatives. "We believe this richer mix of software should allow the company to post an EPS upside," he added. IBM, which is one of TheStreet's top tech stocks for 2012, expects to generate $16 billion in analytics revenue by 2015. Underlining this effort, IBM launched its PureSystems offerings last week; packages of servers, storage, networking and tightly-integrated analytics software. The company also purchased privately-held sales analytics specialist Varicent. During fiscal 2011, IBM's analytics business grew 16% year-over-year, while Smarter Planet, which aims to boost the efficiency of technologies such as power grids and traffic systems, grew almost 50% over the same period. IBM's cloud revenue more than tripled in fiscal 2011.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV