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Factors to Watch as IBM Gears Up to Report Q1 Earnings
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International Business Machines Corporation (IBM - Free Report) is set to report first-quarter 2020 results on Apr 20.
The Zacks Consensus Estimate for first-quarter earnings improved 1 cent over the past seven days to $1.70 per share. Nevertheless, the consensus mark indicates a decline of 24.4% from the prior-year quarter.
For quarterly sales, the consensus mark stands at $17.98 billion that suggests decline of 1.1% from the year-ago reported figure.
Notably, the company has a trailing four-quarter positive earnings surprise of 1.84%, on average.
Factors Likely to Have Influenced Q1 Results
IBM is likely to have benefited from adoption of its cloud computing, mobile, security, analytics, cognitive technologies and AI related solutions in the to-be-reported quarter.
International Business Machines Corporation Price and EPS Surprise
Markedly, deal wins, and acquisitions are expected to have played an important role in bolstering the company’s portfolio and expanding clientele in the cloud market. Particularly, synergies from Red Hat acquisition is likely to have aided revenues in the cloud segment. Markedly, in the fourth-quarter 2019, Red Hat raked in notable large wins, with 21 customers signing deals worth more than $10 million.
Moreover, during the quarter to be reported, IBM Services were selected by Spain-based private banking group, Banco Sabadell, in a ten-year services agreement. Per the deal, IBM’s cloud capabilities will help the banking group to boost digitization. The deal win is likely to have contributed to the first-quarter performance.
Further, IBM has been striving to enhance efficiency of its blockchain solutions, and quantum computing systems and services. In this respect, growing clientele of IBM Q Network remains a positive. Further, incremental adoption of IBM Blockchain-powered Farmer Connect and Food Trust platforms, is likely to get reflected in the first-quarter revenues.
Additionally, IBM’s growth in industry verticals like health, key areas of analytics and security is likely to have boosted first-quarter performance.
However, increasing expenses on enhancing cloud platform amid stiff competition from Microsoft (MSFT - Free Report) Azure and Amazon’s (AMZN - Free Report) Amazon Web Services, are likely to have weighed on profitability in the quarter under review.
Moreover, the coronavirus outbreak is likely to have hindered business prospects in the first quarter, thanks to lockdowns and restricted economic activity, globally.
Notable Developments in Q1
During the first quarter, IBM rolled out Advertising Accelerator with Watson, with predictive analytics capabilities to boost audience engagement. The company also improved IBM Watson with new Natural Language Processing (NLP) capabilities and enhanced business value of data. IBM also added AI capabilities to its TRIRIGA solution to help real estate and facility management professionals better utilize office space and deliver a more engaging workplace experience.
Moreover, IBM announced collaboration with Infosys (INFY - Free Report) to aid enterprises accelerate digital overhaul of business processes by utilizing IBM public cloud.
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Image: Bigstock
Factors to Watch as IBM Gears Up to Report Q1 Earnings
International Business Machines Corporation (IBM - Free Report) is set to report first-quarter 2020 results on Apr 20.
The Zacks Consensus Estimate for first-quarter earnings improved 1 cent over the past seven days to $1.70 per share. Nevertheless, the consensus mark indicates a decline of 24.4% from the prior-year quarter.
For quarterly sales, the consensus mark stands at $17.98 billion that suggests decline of 1.1% from the year-ago reported figure.
Notably, the company has a trailing four-quarter positive earnings surprise of 1.84%, on average.
Factors Likely to Have Influenced Q1 Results
IBM is likely to have benefited from adoption of its cloud computing, mobile, security, analytics, cognitive technologies and AI related solutions in the to-be-reported quarter.
International Business Machines Corporation Price and EPS Surprise
International Business Machines Corporation price-eps-surprise | International Business Machines Corporation Quote
Markedly, deal wins, and acquisitions are expected to have played an important role in bolstering the company’s portfolio and expanding clientele in the cloud market. Particularly, synergies from Red Hat acquisition is likely to have aided revenues in the cloud segment. Markedly, in the fourth-quarter 2019, Red Hat raked in notable large wins, with 21 customers signing deals worth more than $10 million.
Moreover, during the quarter to be reported, IBM Services were selected by Spain-based private banking group, Banco Sabadell, in a ten-year services agreement. Per the deal, IBM’s cloud capabilities will help the banking group to boost digitization. The deal win is likely to have contributed to the first-quarter performance.
Further, IBM has been striving to enhance efficiency of its blockchain solutions, and quantum computing systems and services. In this respect, growing clientele of IBM Q Network remains a positive. Further, incremental adoption of IBM Blockchain-powered Farmer Connect and Food Trust platforms, is likely to get reflected in the first-quarter revenues.
Additionally, IBM’s growth in industry verticals like health, key areas of analytics and security is likely to have boosted first-quarter performance.
However, increasing expenses on enhancing cloud platform amid stiff competition from Microsoft (MSFT - Free Report) Azure and Amazon’s (AMZN - Free Report) Amazon Web Services, are likely to have weighed on profitability in the quarter under review.
Moreover, the coronavirus outbreak is likely to have hindered business prospects in the first quarter, thanks to lockdowns and restricted economic activity, globally.
Notable Developments in Q1
During the first quarter, IBM rolled out Advertising Accelerator with Watson, with predictive analytics capabilities to boost audience engagement. The company also improved IBM Watson with new Natural Language Processing (NLP) capabilities and enhanced business value of data. IBM also added AI capabilities to its TRIRIGA solution to help real estate and facility management professionals better utilize office space and deliver a more engaging workplace experience.
Moreover, IBM announced collaboration with Infosys (INFY - Free Report) to aid enterprises accelerate digital overhaul of business processes by utilizing IBM public cloud.
Zacks Rank
IBM currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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