S&P 500 (NYSE:SPY) component IBM (NYSE:IBM) will unveil its latest earnings tomorrow, Tuesday, January 22, 2013. IBM creates integrated solutions that leverage information technology and a deep knowledge of business processes for clients.
IBM Earnings Preview Cheat Sheet
Wall St. Earnings Expectations: The average estimate of analysts is for profit of $5.25 per share, a rise of 11.5% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from $5.27. Between one and three months ago, the average estimate moved down. It has been unchanged at $5.25 during the last month. For the year, analysts are projecting net income of $15.09 per share, a rise of 12.8% from last year.
Past Earnings Performance: The company met estimates last quarter after beating the forecasts in the prior two. In the third quarter, the company reported profit of $3.62 per share versus a mean estimate of net income of $3.62 per share. In the second quarter, the company beat estimates by 9 cents.
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Stock Price Performance: Between November 15, 2012 and January 15, 2013, the stock price had risen $6.65 (3.6%), from $185.85 to $192.50. The stock price saw one of its best stretches over the last year between September 4, 2012 and September 17, 2012, when shares rose for 10 straight days, increasing 6.5% (+$12.61) over that span. It saw one of its worst periods between September 17, 2012 and September 26, 2012 when shares fell for eight straight days, dropping 1.5% (-$3.15) over that span.
Analyst Ratings: There are mostly holds on the stock with 11 of 21 analysts surveyed giving that rating.
Wall St. Revenue Expectations: Analysts predict a decline of 1.2% in revenue from the year-earlier quarter to $29.15 billion.
After last quarter’s profit drop broke a string of income increases, this earnings announcement is definitely a chance for a rebound. Net income rose 4.4% in the fourth quarter of the last fiscal year, 7.1% in the first quarter and 5.9% in the second quarter before declining in the third quarter.
On the top line, the company is hoping to use this earnings announcement to snap a string of two-straight quarters of revenue declines. Revenue fell 3.3% in the second quarter and dropped again in the third quarter.
A Look Back: In the third quarter, profit fell 0.4% to $3.82 billion ($3.33 a share) from $3.84 billion ($3.19 a share) the year earlier, meeting analyst expectations. Revenue fell 5.4% to $24.75 billion from $26.16 billion.
Here’s how IBM traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week: