IBM Set for Strong Quarter
ARMONK, N.Y. (TheStreet) -- The signs are pointing to strong second-quarter numbers from IBM (IBM) - Get Report when it reports its results after market close on Monday, but the company's stock may not receive a massive boost.
Strong results
from
Intel
(INTC) - Get Report
and
Oracle
(ORCL) - Get Report
are fueling expectations for a strong IBM quarter, and analysts surveyed by Thomson Reuters expect the firm to bring in revenue of $24.17 billion and earnings of $2.58 a share, compared to $23.3 billion and earnings of $2.32 a share in the prior year's quarter.
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Even a strong earnings beat, however, may not prompt
massive movement in IBM shares
. The tech giant's stock has dipped more than 1% this year, despite
and bullish guidance. In May, for example,
IBM strengthened its long-term financial forecast
, vowing to almost double its annual profit over the next five years.
>>IBM On Deck
Speaking at the company's investor meeting, IBM CEO Sam Palmisano forecast annual earnings of $20 a share by 2015. The bullish outlook came just a few weeks after IBM raised its 2010 EPS guidance to at least $11.20.
IBM is
famed for its ability to squeeze profit out of high-margin areas such as software and services
, although the New York firm was one of a slew of companies that
last month as investors reacted to unease about the broader economy.
IBM, which competes with
Microsoft
(MSFT) - Get Report
,
Hewlett-Packard
(HPQ) - Get Report
and services giant
Accenture
(ACN) - Get Report
, is
eyeing mobile devices as a major new source of revenue
, and recently announced a slew of software and services in an attempt to tap the booming smartphone market.
IBM's software business brought in $5 billion during the company's recent first-quarter results, an 11% increase on the same period last year, and almost a quarter of the firm's total revenue.
At least one analyst firm has also raised the possibility of a tepid tech spending environment, which could impact IBM's numbers. Kaufman recently rated IBM new hold,
citing a weak cyclical recovery in services and software spending
.
It has also been suggested previously that IBM's sheer size could be an impediment to growth, although IBM's software chief Steve Mills recently told
TheStreet
that the company's massive scale lets it solve problems that other firms cannot
.
IBM shares rose 69 cents, or 0.46%, to $128.62 in early trading on Monday, mirroring the broader advance in tech stocks that saw the Nasdaq gain 0.51%.
-- Reported by James Rogers in New York
Follow James Rogers on
.
