What to Expect From IBM

International Business Machines (NYSE: IBM  ) is expected to report Q2 earnings on July 18. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict IBM's revenues will wither -1.2% and EPS will improve 11.3%.

The average estimate for revenue is $26.35 billion. On the bottom line, the average EPS estimate is $3.44.

Revenue details
Last quarter, International Business Machines logged revenue of $24.67 billion. GAAP reported sales were 0.3% higher than the prior-year quarter's $24.61 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Last quarter, non-GAAP EPS came in at $2.78. GAAP EPS of $2.61 for Q1 were 13% higher than the prior-year quarter's $2.31 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Recent performance
For the preceding quarter, gross margin was 45.1%, 100 basis points better than the prior-year quarter. Operating margin was 16.4%, 70 basis points better than the prior-year quarter. Net margin was 12.4%, 80 basis points better than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $107.79 billion. The average EPS estimate is $15.05.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 4,165 members out of 4,586 rating the stock outperform, and 422 members rating it underperform. Among 994 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 929 give International Business Machines a green thumbs-up, and 65 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on International Business Machines is outperform, with an average price target of $203.24.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of International Business Machines. Motley Fool newsletter services have recommended creating a synthetic long position in International Business Machines. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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