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Can Solid Consulting Revenues Benefit IBM's Q3 Earnings?
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International Business Machines Corporation (IBM - Free Report) is scheduled to report third-quarter 2023 results on Oct 25, 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 iFoodDS, a prominent traceability and food safety solution provider, to introduce iFoodDS Trace Exchange with IBM Food Trust. The software solution is designed to help enterprises match the FDA’s Food Traceability regulations under FSMA 204(d). Its robust traceability and compliance management capabilities can support the requirements of the industry’s largest enterprises and suppliers of all sizes.
IBM collaborated with Fujifilm to develop a native tape storage system boasting an impressive 50TB capacity. This system is the world's highest-capacity native data tape cartridge, about 2.5 times higher than the previous ones. The newly developed high-density tape cartridge has been designed for IBM's latest enterprise tape drive, the TS1170. The state-of-the-art IBM TS1170 Tape Drive provides enterprises with a remarkable storage capacity of up to 150TB of data on a single tape cartridge with a 3:1 compression ratio. These are likely to be reflected in the upcoming results.
During the quarter, IBM unveiled an expanded version of the IBM Cloud Security and Compliance Center, a comprehensive suite of modernized cloud security and compliance solutions. These solutions are specifically designed to assist enterprises in mitigating risk and safeguarding their data across hybrid, multi-cloud environments and workloads. These are likely to have driven incremental revenues in the Consulting segment in the second quarter.
Overall Expectations
Our estimate for revenues from Consulting is pegged at $5,063.6 million, up from $4,700 million in the year-ago quarter.
The Zacks Consensus Estimate for total revenues for the company stands at $14,804 million. It generated revenues of $14,107 million in the prior-year quarter. The consensus mark for earnings is currently pegged at $2.12 per share, indicating growth from $1.81 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.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -0.08%. 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 Silicon Motion Technology Corporation (SIMO - Free Report) is +3.00% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Nov 1.
The Earnings ESP for Meta Platforms, Inc. (META - Free Report) is +3.98% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Oct 25.
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Can Solid Consulting Revenues Benefit IBM's Q3 Earnings?
International Business Machines Corporation (IBM - Free Report) is scheduled to report third-quarter 2023 results on Oct 25, 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 iFoodDS, a prominent traceability and food safety solution provider, to introduce iFoodDS Trace Exchange with IBM Food Trust. The software solution is designed to help enterprises match the FDA’s Food Traceability regulations under FSMA 204(d). Its robust traceability and compliance management capabilities can support the requirements of the industry’s largest enterprises and suppliers of all sizes.
IBM collaborated with Fujifilm to develop a native tape storage system boasting an impressive 50TB capacity. This system is the world's highest-capacity native data tape cartridge, about 2.5 times higher than the previous ones. The newly developed high-density tape cartridge has been designed for IBM's latest enterprise tape drive, the TS1170. The state-of-the-art IBM TS1170 Tape Drive provides enterprises with a remarkable storage capacity of up to 150TB of data on a single tape cartridge with a 3:1 compression ratio. These are likely to be reflected in the upcoming results.
During the quarter, IBM unveiled an expanded version of the IBM Cloud Security and Compliance Center, a comprehensive suite of modernized cloud security and compliance solutions. These solutions are specifically designed to assist enterprises in mitigating risk and safeguarding their data across hybrid, multi-cloud environments and workloads. These are likely to have driven incremental revenues in the Consulting segment in the second quarter.
Overall Expectations
Our estimate for revenues from Consulting is pegged at $5,063.6 million, up from $4,700 million in the year-ago quarter.
The Zacks Consensus Estimate for total revenues for the company stands at $14,804 million. It generated revenues of $14,107 million in the prior-year quarter. The consensus mark for earnings is currently pegged at $2.12 per share, indicating growth from $1.81 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.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -0.08%. 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 Oct 26. It has an Earnings ESP of +12.98% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for Silicon Motion Technology Corporation (SIMO - Free Report) is +3.00% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Nov 1.
The Earnings ESP for Meta Platforms, Inc. (META - Free Report) is +3.98% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Oct 25.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.