IBM expected to flex muscles with earnings report
By Rex Crum, MarketWatch
Last update: 5:09 p.m. EDT July 10, 2008SAN
FRANCISCO (MarketWatch) -- IBM Corp. is scheduled to report its second-quarter results on July 17, and analysts are expecting strong server sales and few surprises from Big Blue.
Analysts surveyed by FactSet Research estimate IBM will deliver second-quarter earnings of $1.81 a share on $25.9 billion in revenue, up from a profit of $1.55 a share on sales of $23.8 billion in the same period a year ago.
Shaw Wu, of American Technology Research, believes IBM will beat the consensus earnings estimates and report a profit of $1.86 a share. Wu said the quarter's results will likely be driven by strong sales of high-end z-Series servers. Wu also believes IBM will report growing sales in all its main business lines, hardware, software and computer and technology services.
For the year, IBM's shares have largely avoided the pitfalls and wild swings of most other leading tech stocks.
IBM's shares are up about 13% since the start of the year, and currently trade at around $123 a share. Much of IBM's strength has been attributed to the company's strong market position and growth in emerging markets. It is estimated that about 17% of IBM's sales come from countries in emerging markets such as South Africa, Poland, Singapore and Vietnam, where spending on information technology is growing at more than 10% a year.