IBM, the world's largest computer-services provider, is scheduled to release second quarter earnings after the closing bell on Monday, July 19, 2010. Analysts, on average, expect the company to report earnings of $2.58 per share on revenue of $24.25 billion. In the year ago period, the company reported earnings of $2.32 billion on revenue of $23.25 billion. In the last 16 quarters, IBM has topped Wall Street expectations 15 times and met estimates once.
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 markets.
In the preceding first quarter, the Armonk, New York-based company reported that its net income rose 13% to $2.6 billion, or $1.97 a share, from $2.3 billion, or $1.70 a share, in the year-ago period. Revenue increased 5% to $22.9 billion. Analysts, on average, expected the company to report earnings of $1.93 a share on revenue of $22.75 billion. The company's total gross margin for the quarter improved to 43.6% from 43.4% a year ago, led by improving margins in both services segments and software.
In April, the company boosted its full-year earnings outlook to $11.20 per share, compared to its prior outlook of at least $11.00 per share. The company also said it expects constant-currency revenue growth for IBM and for its total services, software and hardware businesses in the second quarter.
In May, IBM Chief Executive Sam Palmisano said that the company expects earnings per share, excluding items, of "at least $20" for 2015. That would be nearly double its reported profit of $10.01 a share last year. "More and more of our profits will come from these higher profit segments," Palmisano said. Over the past decade, IBM has shifted its focus away from low-margin hardware into more lucrative areas such as software and services.
Acquisitions are a key part of IBM's growth strategy. IBM acquisitions announced in second quarter include privately-held cloud computing software firm Cast Iron Systems, data integration software maker Sterling Commerce, web analytics Software maker Coremetrics and security and IT automation software maker BigFix, Inc.
The company has consistently rewarded shareholders with dividend increases as well as share buybacks. In April, the technology bellwether boosted its quarterly dividend payment by 18%, and expanded its stock repurchase program with $8 billion in additional funds. Since 2003, IBM has raised its quarterly dividend over 330%.
In terms of stock performance, IBM shares have lost nearly 1.45 percent since the beginning of the year.
Disclosure: Author doesn't own any of the stocks discussed here.
