Fur sure either IBM provides adjusted guidance on their 2017 EPS or they don't & they just wind-up RA'g everybody to achieve it.
"THE SECOND HALF: IBM’s first-quarter results threw its full-year adjusted earnings forecast of $13.80 per share into question. IBM typically generates 55% of its annual per-share earnings in the third and fourth quarters, analysts said, but the company’s guidance implies a back-end contribution of 63%. That would require the rest of this year to be one of IBM’s two highest-earning second halves in the past 20 years, according to Bernstein Research analyst Toni Sacconaghi —an ambitious goal in his view.
Shareholders will be on the lookout for perspective on factors that could boost second-half earnings including new mainframes, cost-cutting, low tax rates, and favorable currency trends. 'Investors want some level of comfort that we can believe in the target,' said Greg McDowell of JMP Securities."
https://www.wsj.com/articles/ibm-earnings-what-to-watch-1500372000
By: Ted Greenwald
July 18, 2017 6:00 a.m. ET
International Business Machines Corp. IBM +0.28% is scheduled to announce second-quarter earnings after the market closes Tuesday. Here’s what to look for:
EARNINGS FORECAST: For IBM’s second fiscal quarter that ended in June, analysts expect IBM to report per-share earnings of $2.75 on an adjusted basis that omits items including acquisition- and retirement-related charges, according to a survey by Thomson Reuters, down nearly 7% from $2.95 the same quarter a year earlier.
REVENUE FORECAST: Analysts expect total revenue of $19.5 billion for the quarter, down nearly 4% from $20.2 billion a year earlier.
WHAT TO WATCH:
STRATEGIC IMPERATIVES: With its legacy businesses slowing, Big Blue has placed big bets on higher-margin markets it calls “strategic imperatives” such as cloud computing, artificial intelligence, analytics and cybersecurity. Revenue in those areas must expand faster than legacy businesses contract to return IBM to growth after years of falling revenue. In the first quarter, though, revenue growth for strategic imperatives slipped to 13% in constant currency, which some analysts reckon is close to the rate core businesses are declining.
Some degree of declining growth in strategic imperatives is “not unexpected,” said Josh Olson of Edward Jones, explaining that each percentage point becomes harder to achieve as new areas encompass a larger proportion of total revenue (41% last year). “But the decline in the core legacy,” such as on-premises software and equipment, “is worse than expected.”
MARGINS: IBM’s first-quarter results revealed a drop in gross profit margins across all segments, challenging investor confidence in the earning power of purportedly high-margin offerings such as cloud computing and artificial intelligence. Some deterioration is to be expected as the company invests in new businesses and shifts from contracts paid up front to cloud-style recurring revenue, analysts said, but investors are looking for margins to stabilize or rise. The second quarter typically is stronger than the first, said Steven Milunovich of UBS, so “we’ll focus more on year-on-year comparisons.”
THE SECOND HALF: IBM’s first-quarter results threw its full-year adjusted earnings forecast of $13.80 per share into question. IBM typically generates 55% of its annual per-share earnings in the third and fourth quarters, analysts said, but the company’s guidance implies a back-end contribution of 63%. That would require the rest of this year to be one of IBM’s two highest-earning second halves in the past 20 years, according to Bernstein Research analyst Toni Sacconaghi —an ambitious goal in his view.
Shareholders will be on the lookout for perspective on factors that could boost second-half earnings including new mainframes, cost-cutting, low tax rates, and favorable currency trends. “Investors want some level of comfort that we can believe in the target,” said Greg McDowell of JMP Securities.