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Will IBM's Q4 Earnings Benefit From Healthy Revenue Growth?
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International Business Machines Corporation (IBM - Free Report) is scheduled to report fourth-quarter 2023 results on Jan 24, after the closing bell. In the last reported quarter, the New York-based integrated systems provider beat the Zacks Consensus Estimate by 8 cents.
The company is expected to have recorded a top-line expansion year over year, backed by growing demand for its AI-powered solution suite across industries. Management’s policy to expand its portfolio with a strong focus on innovations and strategic buyouts is a tailwind.
Factors at Play
During the fourth quarter, IBM introduced Threat Detection and Response Services (TDR), a new comprehensive suite of AI-powered technologies designed to augment an organization’s cyber defense capabilities. Leveraging AI models, this solution effectively analyses security data and offers 24/7 monitoring and investigation across hybrid cloud environments.
During the quarter, IBM unveiled watsonx.governance, a new addition to its WatsonX AI solution suite, aimed at enhancing the management and monitoring of AI models, whether generated from IBM or through other open-source communities. It enriches enterprises with necessary toolkits that automate AI governance processes, enabling corrective actions to mitigate risks and biases.
IBM introduced a cloud database solution in collaboration with Amazon to streamline the management of AI-driven data workloads. The integration of the IBM Db2 database with Amazon RDS is expected to deliver enhanced scalability and security in databases, empowering enterprises to extract more precise insights from their data. EY collaborated with IBM to develop EY.ai Workforce, a cutting-edge HR solution that optimizes enterprises’ HR processes with the assistance of AI. These are likely to have driven the top-line growth in the Software segment.
Moreover, IBM introduced various advancements in geospatial AI technologies to effectively address the climate challenges and better manage the issues arising from them. IBM has joined forces with premium academic institutes and public enterprises worldwide to accelerate research and further boost the capability of its Geospatial AI models.
During the December quarter, IBM inked a strategic agreement with Riyadh Air. Per the deal, IBM Consulting will provide core technological capabilities and facilitate the implementation of various airline industry solutions spanning from security, infrastructure and data platforms. IBM will also offer program and technical governance, project management, quality assurance, communications management and training.
IBM and KPMG LLP extended their collaboration to assist enterprises in the energy and utilities industry with SAP S/4HANA implementation for business transformation. The partnership intends to minimize risks associated with cloud ERP (enterprise resource planning) projects by leveraging IBM Consulting and KPMG's complementary expertise in SAP technology, cross-sector business processes, regulatory compliance, risk management, finance and tax considerations. These are likely to have generated incremental revenues in the Consulting segment.
The Zacks Consensus Estimate for total revenues for the company stands at $17,116 million. It generated revenues of $16,690 million in the prior-year quarter. The consensus mark for earnings is currently pegged at $3.75 per share, indicating growth from $3.60 in the year-earlier quarter.
Key Developments in Q4
During the to-be-reported quarter, IBM signed a definitive agreement to acquire Software AG’s iPaaS (integration platform-as-a-service) businesses, StreamSets and webMethods. StreamSets and webMethods are industry leaders in data integration, API management and application integration. The buyout is anticipated to be concluded by the second quarter of 2024 through a €2.13 billion cash transaction. Through this buyout, IBM is likely to derive synergy benefits with its current portfolio, which includes watsonx AI, IBM Consulting and other IT automation products.
The company has also made significant advancements in its Quantum Development Roadmap. IBM has unveiled its first modular quantum computer ‘IBM Quantum System Two.’ The system will serve as a foundation for IBM's quantum-centric supercomputing architecture. Unlike the classical simulation methods used in quantum mechanics, IBM Quantum systems provide a more efficient approach to exploring complex problems in chemistry, physics and materials.
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.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -0.08%. 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 NVIDIA Corporation (NVDA - Free Report) is +3.68% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Feb 28.
The Earnings ESP for Meta Platforms, Inc. (META - Free Report) is +1.46% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Feb 1.
Image: Bigstock
Will IBM's Q4 Earnings Benefit From Healthy Revenue Growth?
International Business Machines Corporation (IBM - Free Report) is scheduled to report fourth-quarter 2023 results on Jan 24, after the closing bell. In the last reported quarter, the New York-based integrated systems provider beat the Zacks Consensus Estimate by 8 cents.
The company is expected to have recorded a top-line expansion year over year, backed by growing demand for its AI-powered solution suite across industries. Management’s policy to expand its portfolio with a strong focus on innovations and strategic buyouts is a tailwind.
Factors at Play
During the fourth quarter, IBM introduced Threat Detection and Response Services (TDR), a new comprehensive suite of AI-powered technologies designed to augment an organization’s cyber defense capabilities. Leveraging AI models, this solution effectively analyses security data and offers 24/7 monitoring and investigation across hybrid cloud environments.
During the quarter, IBM unveiled watsonx.governance, a new addition to its WatsonX AI solution suite, aimed at enhancing the management and monitoring of AI models, whether generated from IBM or through other open-source communities. It enriches enterprises with necessary toolkits that automate AI governance processes, enabling corrective actions to mitigate risks and biases.
IBM introduced a cloud database solution in collaboration with Amazon to streamline the management of AI-driven data workloads. The integration of the IBM Db2 database with Amazon RDS is expected to deliver enhanced scalability and security in databases, empowering enterprises to extract more precise insights from their data. EY collaborated with IBM to develop EY.ai Workforce, a cutting-edge HR solution that optimizes enterprises’ HR processes with the assistance of AI. These are likely to have driven the top-line growth in the Software segment.
Moreover, IBM introduced various advancements in geospatial AI technologies to effectively address the climate challenges and better manage the issues arising from them. IBM has joined forces with premium academic institutes and public enterprises worldwide to accelerate research and further boost the capability of its Geospatial AI models.
During the December quarter, IBM inked a strategic agreement with Riyadh Air. Per the deal, IBM Consulting will provide core technological capabilities and facilitate the implementation of various airline industry solutions spanning from security, infrastructure and data platforms. IBM will also offer program and technical governance, project management, quality assurance, communications management and training.
IBM and KPMG LLP extended their collaboration to assist enterprises in the energy and utilities industry with SAP S/4HANA implementation for business transformation. The partnership intends to minimize risks associated with cloud ERP (enterprise resource planning) projects by leveraging IBM Consulting and KPMG's complementary expertise in SAP technology, cross-sector business processes, regulatory compliance, risk management, finance and tax considerations. These are likely to have generated incremental revenues in the Consulting segment.
The Zacks Consensus Estimate for total revenues for the company stands at $17,116 million. It generated revenues of $16,690 million in the prior-year quarter. The consensus mark for earnings is currently pegged at $3.75 per share, indicating growth from $3.60 in the year-earlier quarter.
Key Developments in Q4
During the to-be-reported quarter, IBM signed a definitive agreement to acquire Software AG’s iPaaS (integration platform-as-a-service) businesses, StreamSets and webMethods. StreamSets and webMethods are industry leaders in data integration, API management and application integration. The buyout is anticipated to be concluded by the second quarter of 2024 through a €2.13 billion cash transaction. Through this buyout, IBM is likely to derive synergy benefits with its current portfolio, which includes watsonx AI, IBM Consulting and other IT automation products.
The company has also made significant advancements in its Quantum Development Roadmap. IBM has unveiled its first modular quantum computer ‘IBM Quantum System Two.’ The system will serve as a foundation for IBM's quantum-centric supercomputing architecture. Unlike the classical simulation methods used in quantum mechanics, IBM Quantum systems provide a more efficient approach to exploring complex problems in chemistry, physics and materials.
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.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -0.08%. 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 #2.
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:
InterDigital, Inc. (IDCC - Free Report) is set to release quarterly numbers on Feb 15. It has an Earnings ESP of +1.93% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for NVIDIA Corporation (NVDA - Free Report) is +3.68% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Feb 28.
The Earnings ESP for Meta Platforms, Inc. (META - Free Report) is +1.46% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Feb 1.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.