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Can Healthy Consulting Revenues Benefit IBM's Q2 Earnings?
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International Business Machines Corporation (IBM - Free Report) is scheduled to report second-quarter 2023 results on Jul 19, after the closing bell. In the quarter, the company is likely to have recorded healthy revenues from the Consulting segment with significant traction from the Technology Consulting business.
Factors at Play
The Consulting segment comprises Business Transformation, Technology Consulting and Application Operations. It provides consulting and application management services that offer value and innovation to clients by leveraging industry, technology and business strategy and process know-how.
During the quarter, IBM collaborated with Adobe to support brands with an enhanced content supply chain with next-generation AI capabilities. Integration of Adobe’s generative AI models with the in-depth technical expertise of IBM Consulting services, ranging from technological innovation, design and strategy, will help clients with a simplified generative AI landscape.
IBM also collaborated with the All-England Lawn Tennis Club to introduce generative AI tools in the Wimbledon Championship and bring new features for a premium digital experience for the viewers. One of the key introductions is the AI Draw analysis, which aims to foster greater discussion and engagement within the tennis fan community. In addition, IBM brings a new AI commentary feature that will enable fans to catch some exciting key moments of the matches through insightful highlight clips accompanied by captions. These are likely to have driven incremental revenues in the Consulting segment in the second quarter.
During the quarter, IBM also collaborated with Noname Security, a leading provider of API security, to enhance the protection of customers from vulnerabilities, misconfigurations and design flaws. Integration of Noname’s API security solution with the security capabilities of IBM DataPower will add an extra layer of protection for IBM API Connect. These are likely to be reflected in the upcoming results.
Overall Expectations
The Zacks Consensus Estimate for revenues from Consulting is pegged at $4,903 million.
The Zacks Consensus Estimate for total revenues for the company stands at $15,566 million. It generated revenues of $15,535 million in the prior-year quarter. The consensus mark for earnings is currently pegged at $2.00 per share, indicating a decline from $2.31 in the year-earlier quarter.
Earnings Whispers
Our proven model does not predict an earnings beat for IBM this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here, as elaborated below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at $2.00. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
International Business Machines Corporation Price and EPS Surprise
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
The Earnings ESP for T-Mobile US, Inc. (TMUS - Free Report) is +11.77% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Jul 27.
The Earnings ESP for Meta Platforms, Inc. (META - Free Report) is +6.56% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Jul 26.
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Can Healthy Consulting Revenues Benefit IBM's Q2 Earnings?
International Business Machines Corporation (IBM - Free Report) is scheduled to report second-quarter 2023 results on Jul 19, after the closing bell. In the quarter, the company is likely to have recorded healthy revenues from the Consulting segment with significant traction from the Technology Consulting business.
Factors at Play
The Consulting segment comprises Business Transformation, Technology Consulting and Application Operations. It provides consulting and application management services that offer value and innovation to clients by leveraging industry, technology and business strategy and process know-how.
During the quarter, IBM collaborated with Adobe to support brands with an enhanced content supply chain with next-generation AI capabilities. Integration of Adobe’s generative AI models with the in-depth technical expertise of IBM Consulting services, ranging from technological innovation, design and strategy, will help clients with a simplified generative AI landscape.
IBM also collaborated with the All-England Lawn Tennis Club to introduce generative AI tools in the Wimbledon Championship and bring new features for a premium digital experience for the viewers. One of the key introductions is the AI Draw analysis, which aims to foster greater discussion and engagement within the tennis fan community. In addition, IBM brings a new AI commentary feature that will enable fans to catch some exciting key moments of the matches through insightful highlight clips accompanied by captions. These are likely to have driven incremental revenues in the Consulting segment in the second quarter.
During the quarter, IBM also collaborated with Noname Security, a leading provider of API security, to enhance the protection of customers from vulnerabilities, misconfigurations and design flaws. Integration of Noname’s API security solution with the security capabilities of IBM DataPower will add an extra layer of protection for IBM API Connect. These are likely to be reflected in the upcoming results.
Overall Expectations
The Zacks Consensus Estimate for revenues from Consulting is pegged at $4,903 million.
The Zacks Consensus Estimate for total revenues for the company stands at $15,566 million. It generated revenues of $15,535 million in the prior-year quarter. The consensus mark for earnings is currently pegged at $2.00 per share, indicating a decline from $2.31 in the year-earlier quarter.
Earnings Whispers
Our proven model does not predict an earnings beat for IBM this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here, as elaborated below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at $2.00. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
International Business Machines Corporation Price and EPS Surprise
International Business Machines Corporation price-eps-surprise | International Business Machines Corporation Quote
Zacks Rank: IBM currently has a Zacks Rank #3.
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Intel Corporation (INTC - Free Report) is set to release quarterly numbers on Jul 27. It has an Earnings ESP of +21.05% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for T-Mobile US, Inc. (TMUS - Free Report) is +11.77% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Jul 27.
The Earnings ESP for Meta Platforms, Inc. (META - Free Report) is +6.56% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Jul 26.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.