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IBM Struggles as Tech Spending Fizzles

Stocks in this article: IBM INTC

White expects flat sequential service revenue in the fourth quarter, below typical seasonality, although he's more bullish on the company's software prospects.

"We are modeling Software sales (23% of revenue ) to grow by 38% quarter-over-quarter and above seasonal trends, benefiting from deals pushed out from 3Q12 and into 4Q12," he wrote. White also expects an IBM hardware boost, with its Systems and Technology division, which accounted for 16% of third-quarter revenue, to increase by 50% quarter-over-quarter.

IBM's third-quarter software revenue came in at $5.8 billion, while Systems and Technology sales were $3.9 billion.

The company may provide an update on its long-term financial roadmap. IBM has forecast operating earnings per share of at least $20 by the end of 2015 and predicts that, by that time, growth markets will account for almost 30% of the company's total revenue.

IBM shares rose 0.3% to $194.99 during Monday's trading.

-- Written by James Rogers in New York.

>To submit a news tip, send an email to: tips@thestreet.com.

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