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Can Healthy Consulting Revenues Buoy IBM's Q1 Earnings?
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International Business Machines Corporation (IBM - Free Report) is scheduled to report first-quarter 2023 results on Apr 19, 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 Adobe to launch new content supply chain services. Leveraging Adobe’s creative and experience technologies, the services offer an integrated content supply chain ecosystem that helps drive collaboration across teams, provides access to creative assets, automates tasks and enhances stakeholders’ visibility across projects.
IBM also collaborated with EY to focus on environmental, social and governance solutions to help organizations accelerate business transformation with value-led sustainability. The companies plan to offer solutions with leading technologies such as hyperscaler public cloud or ERP systems-of-record to help clients across diverse hybrid IT landscapes. These are likely to have driven incremental revenues in the Consulting segment in the first quarter.
During the quarter, IBM was selected as a technology partner by Telecom Egypt (“TE”) to modernize and transform network operations in the Middle Eastern country. With the aid of IBM Cloud Pak for Watson AIOps, TE will have a comprehensive overview of its IT ecosystem, enabling greater management and control of the nationwide IT operations. IBM Robotic Process Automation will also help automate the tracking of service quality and network capacity. These automation solutions will greatly increase operational effectiveness, guarantee fast and superior service to end consumers and accelerate the nation's digital growth. These are likely to be reflected in the upcoming results.
Overall Expectations
The Zacks Consensus Estimate for revenues from Consulting is pegged at $4,880 million.
The Zacks Consensus Estimate for total revenues for the company stands at $14,274 million. It generated revenues of $14,197 million in the prior-year quarter. The consensus mark for earnings is currently pegged at $1.27 per share, indicating a decline from $1.40 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, as elaborated below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at $1.27. 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 Corning Incorporated (GLW - Free Report) is +3.71% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Apr 25.
The Earnings ESP for Meta Platforms, Inc. (META - Free Report) is +8.00% and it sports a Zacks Rank of 1. The company is scheduled to report quarterly numbers on Apr 26.
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Can Healthy Consulting Revenues Buoy IBM's Q1 Earnings?
International Business Machines Corporation (IBM - Free Report) is scheduled to report first-quarter 2023 results on Apr 19, 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 Adobe to launch new content supply chain services. Leveraging Adobe’s creative and experience technologies, the services offer an integrated content supply chain ecosystem that helps drive collaboration across teams, provides access to creative assets, automates tasks and enhances stakeholders’ visibility across projects.
IBM also collaborated with EY to focus on environmental, social and governance solutions to help organizations accelerate business transformation with value-led sustainability. The companies plan to offer solutions with leading technologies such as hyperscaler public cloud or ERP systems-of-record to help clients across diverse hybrid IT landscapes. These are likely to have driven incremental revenues in the Consulting segment in the first quarter.
During the quarter, IBM was selected as a technology partner by Telecom Egypt (“TE”) to modernize and transform network operations in the Middle Eastern country. With the aid of IBM Cloud Pak for Watson AIOps, TE will have a comprehensive overview of its IT ecosystem, enabling greater management and control of the nationwide IT operations. IBM Robotic Process Automation will also help automate the tracking of service quality and network capacity. These automation solutions will greatly increase operational effectiveness, guarantee fast and superior service to end consumers and accelerate the nation's digital growth. These are likely to be reflected in the upcoming results.
Overall Expectations
The Zacks Consensus Estimate for revenues from Consulting is pegged at $4,880 million.
The Zacks Consensus Estimate for total revenues for the company stands at $14,274 million. It generated revenues of $14,197 million in the prior-year quarter. The consensus mark for earnings is currently pegged at $1.27 per share, indicating a decline from $1.40 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, as elaborated below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at $1.27. 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:
Verizon Communications Inc. (VZ - Free Report) is set to release quarterly numbers on Apr 25. It has an Earnings ESP of +0.63% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for Corning Incorporated (GLW - Free Report) is +3.71% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Apr 25.
The Earnings ESP for Meta Platforms, Inc. (META - Free Report) is +8.00% and it sports a Zacks Rank of 1. The company is scheduled to report quarterly numbers on Apr 26.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.