International Business Machines Corp. (NYSE: IBM) has now reported its second quarter earnings estimates, and there is some reason to be concerned. The company has been financially engineering its earnings per share growth, and now we have reason to worry that IBM’s backlog is showing no growth ahead.

Here was the full updated 24/7 Wall St. earnings preview for IBM.

IBM’s reported earnings per share of $4.32 on revenues of $24.4 billion. The Thomson Reuters consensus earnings estimates were $4.29 EPS and $24.13 billion in revenue, and the report from WhisperNumber.com indicated that a whisper number on IBM was $4.31 EPS.

On guidance, IBM sees earnings of at least $17.00 per share net and $18.00 per share on an adjusted basis for all of 2014. Estimates for this year are $17.87 EPS adjusted (versus $16.28 a year ago) on a 2.4% revenue drop to $97.4 billion.

This report is still evidence of financial engineering to beat earnings. While IBM has maintained a dead-on target of $20.00 in earnings per share by the end of 2015, the Thomson Reuters consensus estimate for 2015 is $19.78 EPS.

This was also another service orders backlog decline. That backlog shrank to $136 billion from $138 billion. Still, IBM counts its gross margin at 49.1%.

Keep in mind that IBM is the second largest DJIA component by weighting (over 7%). We had noted that shares had been rallying ahead of the report. IBM shares closed up only 13-cents at $192.49, and the after-hours price movement first saw shares pop – only to be down almost $1 on last look.

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