IBM Stock: All Eyes On Upcoming Quarterly Earnings

IBM stock

IBM stock has had a slow growth as a result of its transition process, and the company will have to convince shareholders and investors that the transition is gaining momentum when they report the Q1 2019 financial results. The company is scheduled to report its quarterly earnings on Thursday, April 16, after market hours.

International Business Machines Corporation (NYSE:IBM) had an unremarkable year in the transition from a company dependent on software business and hardware upgrades to a strategic company focused on high margin businesses such as data analytics and cybersecurity.

Q4 2018 Revenue Results

The company had a solid but not so convincing 2018 with revenue in Q4 2108 dropping 3% to $21.8 billion and a $4.4 billion adjusted net income resulting in adjusted EPS of $4.87. IBM’s revenue was affected by foreign currency headwinds and the decline in systems revenue because the IBM Z server upgrades cycle was almost complete.

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IBM’s strategic imperatives had a remarkable performance with the high-tech businesses generating $11.5 billion in revenue accounting for 53% of the company’s revenue in Q42018 and 50% for FY2018. The areas that had double-digit growth included cybersecurity, analytics, and cloud computing. IBM stock growth will rely on the success of the company in developing these strategic imperatives.

2019 Outlook

During the IBM Think 2019 conference, the company announced that it was making a bet on cryptocurrency as well as its blockchain technology. Jesse Lund, the head of blockchain solutions, stated that between 40 and 50 banks are likely to take part in their World Wire Service in the future.

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The company has projected the diluted EPS for 2019 to be around $12.45 and adjusted EPS to be $13.90. The difference is attributed to the recent tax charges and acquisition of Red Hat. According to analyst estimates, the company is expected to report a 2.8% drop in revenue to about $18.53 billion. These projections provide investors with the guidance of what they expect of IBM stock in 2019.

In the morning session, IBM stock is up 0.20% and now trading at $144.15.

Featured image: DepositPhotos © zim90