IBM (NYSE:IBM)
is likely to meet revenue expectations when it announces its Q2 earnings later
today, and may even beat expectations on earnings per share.
A weakening U.S. dollar will provide a boost to revenues for the second quarter
and the rest of the year, says Bernstein Research in a report previewing IBM’s
earnings. Other factors may also be at play.
“Our channel checks indicate that IT spending appears to have largely
stabilized during Q2 in the U.S.,
although spending in Europe was more choppy,” writes senior
analyst Toni Sacconaghi in the Bernstein report.
And while Bernstein’s discussions with CIOs indicate that IT budgets won’t
loosen up in 2009, the
stage is set for a material recovery in 2010. That echoes recent
sentiments from other technology giants such as Intel,
Dell,
Hewlett-Packard and Microsoft.
Bernstein expects IBM to announce revenues
of $23.6 billion, up from $23.4 billion from the same period a year ago and in
line with consensus estimates. The firm expects IBM
earnings per share of $2.07, above the consensus estimate of $2.02.
“In Q2 2009 IBM should benefit from previous
workforce reduction actions, lower shared service cost and lower share count to
help offset lower revenues,” Sacconaghi writes.
Intel
reported stronger than expected revenues and earnings earlier this week.
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