We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Solid Software Revenues Boost IBM's Q1 Earnings Results?
Read MoreHide Full Article
International Business Machines Corporation (IBM - Free Report) is scheduled to report first-quarter 2025 results on April 23, after the closing bell. In the to-be-reported quarter, the company is likely to have recorded higher revenues from the Software segment with a strong focus on product innovation and healthy AI traction across various sectors.
Factors at Play
IBM’s Software segment includes Hybrid Platform & Solutions and Transaction Processing, focusing on technologies that enhance enterprise productivity and innovation. It delivers value through four key areas: Transaction Processing, which supports critical workloads on IBM Z with high security and availability; Automation, which streamlines operations and reduces complexity; Data and AI, which embed intelligence into applications for real-time decision-making; and the Hybrid Cloud Platform (Red Hat), which enables seamless application and AI deployment across diverse environments. All offerings are designed for hybrid cloud use and integrate security and AI by default.
In the to-be-reported quarter, IBM completed the acquisition of California-based software company HashiCorp Inc. for an enterprise value of $6.4 billion. The acquisition has brought powerful synergies across key strategic growth areas of IBM, such as Red Hat, watsonx, and IT automation solutions. HashiCorp’s tools, Terraform and Vault, have been integrated with IBM’s Red Hat platforms to enhance cloud infrastructure management and hybrid cloud security, including for IBM Z. The addition of the new cutting-edge products has significantly improved IBM Software’s ability to help organizations optimize IT spending, reduce cloud costs, and improve overall efficiency through automation.
In the first quarter, IBM entered into a strategic partnership with Telefonica, a Spanish multinational telecommunications company. Per the collaboration, Telefonica will integrate IBM’s quantum-safe enterprise software technology into its cybersecurity services to develop robust security solutions that safeguard businesses and public institutions from the risks of quantum computing threats. L'Oreal has also deployed IBM’s state-of-the-art generative AI technology solutions to enhance its cosmetic formulation processes. These developments are likely to have had a favorable effect on the company’s first-quarter performance.
Mitsubishi Motors, a dominant player in the Canadian auto market, has leveraged IBM’s watsonx portfolio to develop an AI-native customer interaction solution called Intelligent Companion. By combining Lenovo’s infrastructure solutions within its watsonx AI portfolio, IBM is delivering tailored AI solutions for distinct requirements in Saudi Arabia. These developments are likely to have supported the top line in the Software segment.
In the March quarter, IBM extended its collaboration with NVIDIA Corporation to scale AI workloads and agentic AI applications. Per this extended agreement, IBM will launch a content-aware storage capability for its hybrid cloud infrastructure offering (dubbed IBM Fusion) and expand its watsonx integrations with NVIDIA while introducing new IBM Consulting capabilities. This advancement is likely to have generated incremental revenues for IBM in the upcoming quarter, propelling its stock momentum.
Overall Expectations
The Zacks Consensus Estimate for revenues from the Software segment is pegged at $6.27 billion. Our model projects revenues of $5.97 billion.
For the March Quarter, our estimate for the company’s total revenues is pegged at $14.45 billion, indicating a decline from $14.46 billion reported in the prior-year quarter. Adjusted earnings per share is pegged at $1.42, indicating a decrease from $1.68 reported in the prior-year quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Earnings Whispers
Our proven model does not predict an earnings beat for IBM for the first quarter. 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 -1.68%. 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
QUALCOMM Incorporated (QCOM - Free Report) is set to release quarterly numbers on April 29. It has an Earnings ESP of +0.86% and carries a Zacks Rank #2.
CGI Group (GIB - Free Report) is set to release quarterly numbers on April 30. It has an Earnings ESP of +0.89% and carries a Zacks Rank #2.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Will Solid Software Revenues Boost IBM's Q1 Earnings Results?
International Business Machines Corporation (IBM - Free Report) is scheduled to report first-quarter 2025 results on April 23, after the closing bell. In the to-be-reported quarter, the company is likely to have recorded higher revenues from the Software segment with a strong focus on product innovation and healthy AI traction across various sectors.
Factors at Play
IBM’s Software segment includes Hybrid Platform & Solutions and Transaction Processing, focusing on technologies that enhance enterprise productivity and innovation. It delivers value through four key areas: Transaction Processing, which supports critical workloads on IBM Z with high security and availability; Automation, which streamlines operations and reduces complexity; Data and AI, which embed intelligence into applications for real-time decision-making; and the Hybrid Cloud Platform (Red Hat), which enables seamless application and AI deployment across diverse environments. All offerings are designed for hybrid cloud use and integrate security and AI by default.
In the to-be-reported quarter, IBM completed the acquisition of California-based software company HashiCorp Inc. for an enterprise value of $6.4 billion. The acquisition has brought powerful synergies across key strategic growth areas of IBM, such as Red Hat, watsonx, and IT automation solutions. HashiCorp’s tools, Terraform and Vault, have been integrated with IBM’s Red Hat platforms to enhance cloud infrastructure management and hybrid cloud security, including for IBM Z. The addition of the new cutting-edge products has significantly improved IBM Software’s ability to help organizations optimize IT spending, reduce cloud costs, and improve overall efficiency through automation.
In the first quarter, IBM entered into a strategic partnership with Telefonica, a Spanish multinational telecommunications company. Per the collaboration, Telefonica will integrate IBM’s quantum-safe enterprise software technology into its cybersecurity services to develop robust security solutions that safeguard businesses and public institutions from the risks of quantum computing threats. L'Oreal has also deployed IBM’s state-of-the-art generative AI technology solutions to enhance its cosmetic formulation processes. These developments are likely to have had a favorable effect on the company’s first-quarter performance.
Mitsubishi Motors, a dominant player in the Canadian auto market, has leveraged IBM’s watsonx portfolio to develop an AI-native customer interaction solution called Intelligent Companion. By combining Lenovo’s infrastructure solutions within its watsonx AI portfolio, IBM is delivering tailored AI solutions for distinct requirements in Saudi Arabia. These developments are likely to have supported the top line in the Software segment.
In the March quarter, IBM extended its collaboration with NVIDIA Corporation to scale AI workloads and agentic AI applications. Per this extended agreement, IBM will launch a content-aware storage capability for its hybrid cloud infrastructure offering (dubbed IBM Fusion) and expand its watsonx integrations with NVIDIA while introducing new IBM Consulting capabilities. This advancement is likely to have generated incremental revenues for IBM in the upcoming quarter, propelling its stock momentum.
Overall Expectations
The Zacks Consensus Estimate for revenues from the Software segment is pegged at $6.27 billion. Our model projects revenues of $5.97 billion.
For the March Quarter, our estimate for the company’s total revenues is pegged at $14.45 billion, indicating a decline from $14.46 billion reported in the prior-year quarter. Adjusted earnings per share is pegged at $1.42, indicating a decrease from $1.68 reported in the prior-year quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Earnings Whispers
Our proven model does not predict an earnings beat for IBM for the first quarter. 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 -1.68%. 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 has a Zacks Rank #3.
Stocks to Consider
Qorvo (QRVO - Free Report) is set to release quarterly numbers on April 29. It has an Earnings ESP of +3.42% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here
QUALCOMM Incorporated (QCOM - Free Report) is set to release quarterly numbers on April 29. It has an Earnings ESP of +0.86% and carries a Zacks Rank #2.
CGI Group (GIB - Free Report) is set to release quarterly numbers on April 30. It has an Earnings ESP of +0.89% and carries a Zacks Rank #2.