International Business Machines (NYSE: IBM) – Q2 FY 2011 Earnings Preview
By:NewsyStocks   Wednesday, July 06, 2011 2:56 PM

A leading technology firm, International Business Machines (NYSE: IBM) is expected to report its second quarter FY 2011earnings on July 18, 2011. In the last four quarters ended March 2011, the company's reported EPS exceeded Wall Street consensus estimates by margins in the range of 1.20 percent to 4.80 percent.


IBM is a leading global technology firm that offers variety of products in the information technology industry. The company's major operations consist of five business segments: global technology services, global business services, software, systems and technology and global financing. Currently IBM is taking a strong position in the cloud computing sector around the world. Its latest contract is with the Indian government, which wants to help millions of people to find work using their mobile devices.


For Q1 FY 2011

  • IBM reported total revenue of $24.6 billion, up 7.7 percent, compared with revenue of $22.85 billion in the first quarter of FY 2010. The rise in revenue is mainly due to a boost in the sales revenue of its systems and technology segment, which rose by 18.7 percent during the quarter.
  • Net income rose 10.1 percent to $2.8 billion, compared with net income of $2.6 billion in the comparable quarter last year.
  • Earnings grew 17.3 percent to $2.31 per diluted share, compared to earnings of $1.97 per diluted share in the same quarter last year.
  • Operating (non-GAAP) diluted earnings were $2.41 per share, compared with operating diluted earnings of $2.00 per share in the first quarter of 2010, an increase of 21 percent.
  • Revenue from the company's growth market increased 18 percent. Revenue in the BRIC countries increased by 26 percent during the quarter.

For FY 2010

For full year FY 2010, net income was $14.8 billion compared with $13.4 billion in the year-ago period, an increase of 10 percent. Diluted earnings were $11.52 per share compared with $10.01 per diluted share in 2009, an increase of 15 percent, and the eighth-consecutive year of double-digit EPS growth. Revenue for 2010 totaled $99.9 billion, an increase of 4 percent, compared with $95.8 billion in 2009.

FY 2011 Company's Guidance

IBM raised its full year 2011 guidance after the strong first quarter results. The company now expects GAAP diluted earnings per share of at least $12.73, up from at least $12.56 per share. IBM expects operating (non-GAAP) diluted earnings per share to be t least $13.15, up from at least $13.00.

Analysts Forecast

For the second quarter, analysts' EPS estimates range from a low of $2.91 to a high of $3.19 per share, compared with a consensus estimate of $2.61 per share to $3.03 per share in the year ago quarter. For this quarter, analysts' revenue estimates range from a low of $24.64 billion to a high of $26.09 billion, compared with a consensus estimate of $23.72 billion to $25.35 billion in the same quarter a year ago. For the second quarter, the consensus EPS forecast has been increased from $3.02 per share estimated 60 days ago to the current estimate of $3.03 per share.

In the last 52 weeks, IBM's shares have been trading in the range of $120.61 to $173.54. IBM last traded at $167.62, up 1.54 percent, on June 27. During the second quarter, analysts at Canaccord Genuity brokerage firm downgraded IBM's stock rating to Hold from Buy.