Jan 17 IBM Corp (IBM.N) is expected to
report solid fourth quarter results on Jan. 19 under new chief
executive Virginia Rometty as investors look for news about the
potential impact of the Eurozone crisis and currency headwinds
For IBM, a bellwether stock due to its global reach and wide
range of corporate and federal customers, analysts on average
expect operating earnings per share of $4.62, a more than 10
percent increase from the quarter a year earlier.
Fourth quarter revenue is seen at $29.7 billion compared
with $29.0 billion in the last quarter of 2010, according to
Thomson Reuters I/B/E/S.
Barclays was expecting a modest EPS upside for IBM's fourth
quarter, but that "aging product cycles in hardware, currency
headwinds and decelerating global economies should likely limit
any upside to IBM’s top-line" in 2012.
The euro hit a 16-month low last week, but rose against the
dollar after two days of losses. [ID:nL1E8CHBSQ]
Poor results from software maker Oracle Corp ORCL.O last
month and a cautious quarterly outlook by consulting firm
Accenture Plc (ACN.N) have spooked investors already worried
about the ramifications of economic problems in Europe.
But last week, SAP AG (SAPG.DE), the biggest maker of
business software, cheered investors with better than expected
sales and profits thanks to strong demand for software and data
Investors will also be keen to get a feel for new chief
executive Rometty, a long-time IBM manager who succeeded Sam
Palmisano on Jan 1.
Rometty is credited with the smooth integration of
PriceWaterhouseCoopers' consulting arm, which IBM bought nearly
a decade ago in June 2002 as it transformed itself to focus on
higer-margin businesses such as data analytics and services that
help customers solve business problems with technology.
Rometty is expected to continue to implement Palmisano's
growth strategy aimed at reaching an operating EPS of at least
$20 by the end of 2015.
Investors will also be looking for the number of signings of
services contracts, an early indicator of future business
The shares of the Armonk, N.Y.-based company, closed with a
0.84 percent gain on Tuesday at $180.
According to equity research firm StarMine, which gives more
weight to forecasts from the historically most accurate
analysts, IBM trades at 12.3 times its estimated 12-month
forward earnings, a premium to peers Oracle and Hewlett Packard
Co (HPQ.N), which are valued at multiples of 10.8 and 6.4 times,
(Reporting By Nicola Leske; editing by Andre Grenon)
((Nicola.Leske@thomsonreuters.com)(+1 646 223 6134)(Reuters
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