IBM Needs an Earnings Win Next Week

IBM Needs an Earnings Win Next Week

After surging 20% in 2016, shares of International Business Machines (NYSE: IBM) fell back into a funk this year. The stock is down about 7.5% year to date, driven lower by a disappointing first-quarter report in April. While IBM beat expectations for earnings, the delayed closing of a few major services deals led the company to miss on revenue.

IBM will have a chance to redeem itself when it reports its second-quarter results after the market closes on July 18. At least one of those delayed deals, a $1.7 billion cloud services pact with a major U.K. bank, was completed during the second quarter, as was a high-profile deal with seven European banks to build a trade finance platform based on blockchain, the technology that underlies cryptocurrencies like bitcoin.

Another quarterly revenue decline is likely, which will extend IBM's infamous streak to 21 consecutive quarters. IBM has beaten the average analyst estimate for earnings for 10 straight quarters, though, and another beat would provide some good news for investors. IBM will also likely reiterate its full-year earnings and free cash flow guidance, which calls for adjusted earnings per share of at least $13.80 and flat free cash flow compared to 2016.

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Source: Fool.com