IBM (IBM) Q3 Earnings Report Preview: What To Look For
Technology and consulting giant IBM (NYSE:IBM) will be announcing earnings results this Wednesday after market hours. Here’s what to look for.
IBM missed analysts’ revenue expectations last quarter, reporting revenues of $17.16 billion, up 1.1% year on year. It was a slower quarter for the company, with EPS in line with analysts’ estimates.
Is IBM a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, the market is expecting IBM’s revenue to grow 2.8% year on year, slowing from the 9.1% increase it recorded in the same quarter last year.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. IBM has missed Wall Street’s revenue estimates multiple times over the last two years.
Looking at IBM’s peers in the it services & other tech segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Accenture delivered year-on-year revenue growth of 6.2%, beating analysts’ expectations by 3.5%, and Applied Digital reported revenues up 322%, topping estimates by 153%. Accenture traded up 8.5% following the results while Applied Digital’s stock price was unchanged.
Read our full analysis of Accenture’s results here and Applied Digital’s results here.
In the last twelve months or so, the market has shifted its attention from one area of macro importance to the next (AI disintermediation and AI capex spending to geopolitical conflict, rates, and whether the economy is on solid footing or not). While some of the it services & other tech stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 3% on average over the last month. IBM is up 1.8% during the same time and is heading into earnings with an average analyst price target of $243.09 (compared to the current share price of $236.00).
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