IBM Corp. (NYSE: IBM): Q2 Earnings Preview 2011

International Business Machines Corp. (NYSE: IBM), the world's largest computer-services provider, is scheduled to release second-quarter earnings after the closing bell on Monday, July 18, 2011. Analysts, on average, expect the company to report earnings of $3.03 per share on revenue of $25.35 billion. In the year ago quarter, the company reported earnings of $2.61 per share on revenue of $23.72 billion.

International Business Machines Corporation, often considered a technology bellwether, develops and manufactures information technology products and services worldwide. Its Global Technology Services segment offers IT infrastructure and business process services, such as strategic outsourcing, integrated technology, business transformation outsourcing, and maintenance. The company dominates mainframe and server market.

In the preceding first quarter, the Armonk, New York-based company's net income was $2.9 billion, or $2.31 per share, compared to $2.6 billion, or $1.97 per share, in the year-ago quarter.  Revenue grew 8 percent on actual rates to $24.6 billion from $22.85 billion in the first quarter of 2010. Analysts, on average, expected the company to report earnings of 39 cents per share on revenue of $857.49 million.  

At its last earnings call in April, IBM lifted its expectations for full-year 2011 GAAP earnings per share to $12.73 from its previous outlook of $12.56 per share and operating (non-GAAP) earnings per share to $13.15 from its prior guidance of $13.00. The 2011 operating (non-GAAP) earnings exclude $0.42 per share of charges for amortization of purchased intangible assets, other acquisition-related charges, and retirement-related charges driven by changes to plan assets and liabilities primarily related to market performance..

The company's goal for 2015 is to reach $20 of earnings per share. The company’s projections for 2015 assume about 5 percent in annual sales growth. IBM plans to save $8 billion through productivity gains by 2015, while free cash flow should reach $100 billion over that span. The company plans to give 70 percent of the cash flow to shareholders.]

The company recently unveiled new software and services to rapidly analyze massive amounts of data from sources like the Internet, further expanding the tech giant's footprint in the fast-growing market. The company also said it would invest $100 million in continued research on technologies and services that help businesses manage and use data as the data grow in diversity, speed and volume. Investment in analytics has increased sharply in recent years as companies use more powerful technology to organize and analyze the influx of data generated on the Web and on devices like smartphones. IBM has invested more than $1 billion in research around analytics software and also has spent $14 billion on 24 acquisitions over the past five years. The company, which doesn't disclose how much it currently makes from analytics, expects to generate $16 billion in revenue from the field by 2015.

Acquisitions are a key part of IBM's growth strategy. The company has been investing in acquisitions to build its skills and technology in support of growth initiatives such as business analytics, and cloud computing. Last year, Chief Executive Officer Sam Palmisano said that he plans to spend $20 billion on acquisitions in the next five years. IBM has also benefited from heavy investments in emerging countries.

IBM is poised to benefit from the growth in corporate spending on information technology. Global spending on information technology is expected to grow 7.1 per cent this year to $3.672 trillion, according to research firm Gartner. It had previously forecast 5.6 per cent growth this year. 

During the quarter in review, the company boosted its quarterly dividend by 15% to 75 cents a share from 65 cents in the previous quarter. The board also authorized $8 billion in additional funds for the company's stock repurchase program.

Full Disclosure: None.

IBM Corp. (NYSE: IBM): Q1 Earnings Preview 2011

International Business Machines Corp. (NYSE: IBM), the world's largest computer-services provider, is scheduled to release first-quarter earnings after the closing bell on Tuesday, April 19, 2011. Analysts, on average, expect the company to report earnings of $2.30 per share on revenue of $24.02 billion. In the year ago quarter, the company reported earnings of $1.97 per share on revenue of $22.86 billion.

International Business Machines Corporation, often considered a technology bellwether, develops and manufactures information technology products and services worldwide. Its Global Technology Services segment offers IT infrastructure and business process services, such as strategic outsourcing, integrated technology, business transformation outsourcing, and maintenance. The company dominates mainframe and server market.

In the preceding fourth quarter, the Armonk, New York-based company's net income was $5.25 billion or $4.18 per share from $4.81 billion or $3.59 per share in the previous year.  Revenue grew 6.6% to $29.02 billion from $27.23 billion. Analysts, on average, expected the company to report earnings of $4.08 per share on revenue of $28.26 billion. 

At its last earnings call in January, IBM said that it expects GAAP earnings of at least $12.56 per share and operating earnings, a non-GAAP measure, of at least $13.00 per share. Operating earnings for 2011 exclude $0.44 per share for the amortization of purchased intangible assets, other acquisition-related charges and certain retirement-related costs.

The company's goal for 2015 is to reach $20 of earnings per share. The company’s projections for 2015 assume about 5 percent in annual sales growth. IBM plans to save $8 billion through productivity gains by 2015, while free cash flow should reach $100 billion over that span. The company plans to give 70 percent of the cash flow to shareholders.

Acquisitions are a key part of IBM's growth strategy. The company has been investing in acquisitions to build its skills and technology in support of growth initiatives such as business analytics, and cloud computing. Last year, Chief Executive Officer Sam Palmisano said that he plans to spend $20 billion on acquisitions in the next five years.

IBM is poised to benefit from the growth in corporate spending on information technology. Global spending on information technology is expected to grow 5.1% in 2011 to $3.6 trillion, according to research firm Gartner. 

However,  IBM's first-quarter earnings could be impacted by the recent earthquake and tsunami in Japan. According to industry experts, roughly 11% of IBM's revenue originate in Japan.

During the quarter in review, the company launched a new initiative called “Smarter Commerce,” which IBM says is focused on helping its customers use software and services to improve marketing efforts. Some of the features include analytic tools so that clients can better market their products over social-networking sites such as Facebook and Twitter, according to IBM.

The company's stock currently trades at a forward P/E (fye Dec 31, 2012) of 11.37 and PEG ratio (5 yr expected) of 1.15. In terms of stock performance, IBM shares have gained nearly 25 percent over the past year.

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IBM Corp. (NYSE: IBM): Q4 Earnings Preview 2010

International Business Machines Corp. (NYSE: IBM ), the world's largest computer-services provider, is scheduled to release fourth-quarter earnings after the closing bell on Tuesday, January 18, 2011. Analysts, on average, expect the company to report earnings of $4.08 per share on revenue of $28.27 billion. In the year ago quarter, the company reported earnings of $3.59 per share on revenue of $27.23 billion.

International Business Machines Corporation, often considered a technology bellwether, develops and manufactures information technology products and services worldwide. Its Global Technology Services segment offers IT infrastructure and business process services, such as strategic outsourcing, integrated technology, business transformation outsourcing, and maintenance. The company dominates mainframe and server market.

In the preceding third quarter, the Armonk, New York-based company's net income was $3.6 billion, or $2.82 a share, from $3.2 billion, or $2.40 a share, in the year-ago period. Excluding non-operating pension charges and acquisition-related charges, operating net earnings would have been $3.63 billion or $2.85 per share for the quarter.Revenue grew 3% to $24.3 billion. Analysts, on average, expected the company to report earnings of $2.75 per share on revenue of $24.12 billion. The third quarter's profitability was fueled by margin expansion due to a shift to the higher-margin software business, increased sales in emerging and growth markets and higher development in the hardware, software and services businesses.

At its last earnings call in October, IBM boosted its fiscal 2010 earnings outlook. The company said that it now expects fiscal 2010 earnings to be at least $11.40 per share. Previously the company anticipated earnings of at least $11.25 per share.

When it comes to earnings per share, the company has met its 2010 goal of $10, a year ahead of schedule. It's goal for 2015 is to reach $20 of earnings per share. The company’s projections for 2015 assume about 5 percent in annual sales growth. IBM plans to save $8 billion through productivity gains by 2015, while free cash flow should reach $100 billion over that span. The company plans to give 70 percent of the cash flow to shareholders.

Acquisitions are a key part of IBM's growth strategy. The company has been investing in acquisitions to build its skills and technology in support of growth initiatives such as business analytics, and cloud computing. Early in 2010, Chief Executive Officer Sam Palmisano said that he plans to spend $20 billion on acquisitions in the next five years.

IBM is poised to benefit from the growth in corporate spending on information technology. Global spending on information technology is expected to grow 2.4% in 2010 to $2.4 trillion and 3.1% in 2011, according to research firm Gartner. 

The company has consistently rewarded investors with share buybacks and dividends. Late in October, IBM's board of directors approved a plan to buy back $10 billion worth of the technology giant's stock. This amount is in addition to approximately $2.3 billion remaining at the end of September 2010 from a prior authorization. With this new authorization, IBM will have approximately $12.3 billion for its stock repurchase program.The company said it also expects to seek additional stock buyback authorization at the IBM board's April 2011 meeting.  IBM has made more than 100 purchases in the past decade. The board also declared a regular quarterly cash dividend of $0.65 per common share.

In terms of stock performance, IBM shares have gained nearly 13 percent over the past year.

Full Disclosure: None.

IBM Corp. (NYSE: IBM): Q1 Earnings Preview 2010

IBM, the world's largest computer-services provider, is scheduled to release Q12010 earnings after the closing bell on Monday, April 19, 2010. Analysts, on average, expect the company to report earnings of $1.93 per share in the first quarter with estimates ranging from a low of $1.83 to a high of $2 per share. Revenues for the quarter are estimated to be $22.80 billion. In Q12009, the company reported earnings of $1.70 per share on revenue of $21.71 billion.

International Business Machines Corporation, often considered a technology bellwether, develops and manufactures information technology products and services worldwide. Its Global Technology Services segment offers IT infrastructure and business process services, such as strategic outsourcing, integrated technology, business transformation outsourcing, and maintenance. In the last 15 quarters, IBM has topped Wall Street estimates 14 times and met estimates once. The company dominates mainframe and server market.

In the preceding Q42009, the Armonk, New York-based company reported that its net income rose 9% to $4.81 billion or $3.59 per share, compared to $4.43 billion or $3.27 per share, in the year-ago quarter. Revenue grew 1% to $27.23 billion from $27.01 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of $3.47 per share on revenue of $26.96 billion. The company's total gross margin for the quarter improved to 48.3% from 47.9% a year ago, helped by higher margins in its services segments and Systems and Technology. IBM signed services contracts worth $18.8 billion during the quarter, an increase of 9% from last year, including 22 contracts greater than $100 million. The company ended the fourth quarter with an estimated services backlog of $137 billion at actual rates, compared to $134 billion at September 30, and $134 billion a year ago.

IBM expects full year 2010 earnings of at least $11.00 per share. In October, the company had said it remained well ahead of pace for its 2010 roadmap of $10 to $11 per share. IBM Chief Financial Officer Mark Loughridge said in January that for IBM's current, fiscal first quarter, "we expect a 4 to 5 point improvement in IBM's year-to-year revenue growth rate from the fourth quarter." By that measure, IBM's forecast would put revenue between $22.8 billion and $23 billion, while analysts had given a consensus estimate for sales of $22.3 billion.

The company is poised to benefit from uptick in corporate IT spending and improving economy. According to a Morgan Stanley survey, spending on technology is set to grow about 3.2% in 2010.

Acquisitions are a key part of IBM's growth strategy. In January, IBM agreed to buy privately-held National Interest Security Co., LLC to further strengthen its ability to deliver advanced analytics and IT solutions to the public sector. In February, IBM signed a definitive agreement to acquire Initiate Systems. It also acquired Intelliden Inc., a provider of intelligent network automation software that enables organizations such as telecommunications companies to configure, manage and scale their networks.

In terms of stock performance, IBM shares have lost nearly 1.3 percent since the beginning of the year.

Full Disclosure: None.

IBM Corp. (NYSE: IBM): Q4 Earnings Preview 2009

IBM Corp. (NYSE: IBM), the world's largest computer-services provider, is scheduled to release financial results for the fourth quarter after the market close on Tuesday, January 19, 2009. Analysts, on average, expect the company to report earnings of $3.47 per share on revenue of $26.96 billion. In the year ago quarter, the company reported earnings of $1.49 per share on revenue of $27.01 billion.

International Business Machines Corporation, often considered a technology bellwether, develops and manufactures information technology products and services worldwide. Its Global Technology Services segment offers IT infrastructure and business process services, such as strategic outsourcing, integrated technology, business transformation outsourcing, and maintenance. In the last 14 quarters, IBM has topped Wall Street estimates 13 times and met estimates once. The company dominates mainframe and server market.

In October, the Armonk, New York-based technology giant reported that its third quarter profit rose 14% from last year, as a lower tax rate, improved gross margins and strict cost control more than offset a 7% revenue drop. Net income climbed to $3.21 billion or $2.40 per share, compared to $2.82 billion or $2.04 per share, in the year-earlier period. Quarterly revenue dropped 7% to $23.57 billion from $25.30 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of $2.38 per share on revenue of $23.40 billion. IBM chairman, president and chief executive officer Samuel Palmisano attributed the strong performance to the company's long-term strategic shift to higher-value businesses and improved revenue trends in our business and share gains in software and hardware."

The company's total gross margin for the third quarter expanded by 1.8 points to 45.1% from 43.3% a year ago, primarily due to better margins in services and software and a more profitable mix of business. Total expense and other income for the quarter decklined 11.5% year-over-year to $6.3 billion, with SG&A expenses down 11.2% and R&D expenses down 8.4%. IBM's effective tax rate in the third quarter was 26.5%, compared to 27.5% in the third quarter of last year. IBM generated $3.4 billion of free cash flow in the quarter, up $1.3 billion year to year.

The company said that it signed services contracts worth $11.8 billion during the third quarter, a decrease of 7% from last year, including 13 contracts greater than $100 million. IBM ended the third quarter with an estimated services backlog of $134 billion at actual rates, compared to $132 billion at June 30, and $129 billion a year ago.

IBM said in October that it expects full year 2009 earnings of at least $9.85 per share, compared to its prior guidance of at least $9.70 per share. Additionally, it expects about $3.5 billion of cost and expense savings this year from the structural actions."We are optimistic about 2009 as we again raise our full-year expectations and we remain well ahead of pace for our 2010 roadmap of $10 to $11 per share," Palmisano said in a statement.

IBM also stands to gain from worldwide economic recovery programs. In US, the company helped the Obama administration design its infrastructure investment plan while in China it is ready to bid for projects related to creating "smart" electrical grids, improving railroads and providing computer support for electronic patient records.

Acquisitions are a key part of IBM's growth strategy. Last month, the company announced the signing of a definitive agreement to acquire Lombardi, a privately held software company, in its attempt to meet the rising demand for business process managment solutions. Financial terms of the agreement were not disclosed. IBM said that Lombardi's department-level business approach complements its existing strengths in enterprise-wide process management software and adds a new dimension for customers looking for integrated solutions. Late in November, IBM announced that it has acquired Guardium, a privately held companyreal-time enterprise database monitoring and protection company. Guardium's technology helps clients safeguard data, monitor database activity and reduce operational costs by automating regulatory compliance tasks. Financial terms were not disclosed.

The company has consistently rewarded investors with share buybacks and dividends. Late in October, IBM approved $5 billion in share buybacks, reflecting the company's strong cash flows. The latest authorization was in addition to about $4.2 billion remaining at the end of September from a prior authorization. The Armonk, New York-based company also said it expects to request additional share buyback authorization at the April board meeting. Additionally, during the fourth quarter, the technology firm declared a regular quarterly cash dividend of $0.55 per share, payable on December 10 to stockholders of record on November 10.

The company is expected to deliver a strong fourth quarter as it bagged many big contracts and acquired several new clients during the period. In terms of stock performance, IBM shares are up 48% over the past year.

Full Disclosure: None.