International Business Machines Corporation (NYSE: IBM) is set to report earnings after the close and this is going to filter down all the way through the world of IT consulting and many hardware players. Companies like Oracle Corporation (NASDAQ: ORCL), Computer Sciences Corporation (NYSE: CSC), and even Infosys Limited (NASDAQ: INFY) have all tempered expectations here.
The company may have a new CEO and may have Warren Buffett behind it, but the stock has not exactly gotten off to a great start. In fact, it has languished when some have rallied. The problem is that many IT-services have suffered of late and there is just little reason to believe any major upside is happening here when all others have been weak.
Shares are down about 10% from the year high and the heaviest of the heavy weighted DJIA components accounts for almost 10% of the DJIA.
The earnings estimate from Thomson Reuters is $4.62 EPS on $29.74 billion in sales. The most recent guidance offered for 2011 was “to at least $13.35 EPS from at least $13.25 EPS” and that valued IBM at a premium to the bulk of the large technology outfits.
We will be keeping a close eye on the services backlog of orders to make sure the company is replacing its growth and revenues ahead. The September-end figure was down to $137 billion, versus a June figure for backlog of about $144 billion.
At $181.33, IBM’s is between its 50-day moving average $185.19) and the 200-day moving average ($174.45). Options traders appear to be only braced for a move of $3 or $4 in either direction after the news, but the options expiration date is tomorrow.
JON C. OGG
Top Gaining Stocks
Top Losing Stocks