Earnings Preview: IBM to Maintain Positive Result Streak
By:NewsyStocks   Wednesday, January 18, 2022 10:20 AM



IBM is scheduled to announce its fourth quarter earnings on January 19th, 2012. The company is expected to report its quarterly earnings at $4.62 per share, up 9 percent year on year basis. IBM is also likely to report strong annual results as it consolidates its market position. However, its hardware segment is still expected to show weak results, while its software division maintains its growth cycle. The company is also expected to report strong backlog recovery.

Expectations

IBM is expected to report its revenue at $29.8 billion for the fourth quarter of Financial Year 2011. The company is likely to report 8 percent decline in its hardware revenue on year over year basis, while its software revenue for the fourth quarter is likely to report 8 percent increase on year over year basis. IBM is also expected to report 3 percent improvement in its backlog. The company's service revenue is expected to show 4 percent growth for the quarter. IBM's quarterly numbers are also likely to suffer due to unfavorable currency movements.

Third Quarter Results

IBM had reported its service revenue for the third quarter of FY 2011 at $137 billion, down 5 percent on quarter on quarter basis. The company is expected to maintain its positive momentum in 2012 with strong pipeline growth. However, mainframe cycling is likely to hurt the company's hardware division, which is already its weakest link. The software segment is expected to grow 6 percent on year over year basis. Its service segment is likely to show 2 percent growth rate on year over year basis.

Punch Line

IBM is expected to perform well despite slowdown in its software revenue during the fourth quarter of the year. The software revenue had grown at the rate of 13 Percent during the third quarter of the year, but the rate slowed down during the fourth quarter to 8 percent. IBM is also expected to maintain its leadership position in the market despite tough macroeconomic scenario.

 

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