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Tickers in this Article: IBM
IBM (NYSE:IBM) is expected to report increased earnings when it releases its third quarter results on Tuesday, October 16, 2012. The consensus estimate is anticipating a profit of $3.61 a share, an increase from last year's $3.28 per share.

Investors care about earnings because they drive stock prices. Strong earnings generally result in the stock price moving up and vice versa. SEE: Earnings: Quality Means Everything

What to Expect: IBM is expected to report $3.61 per share, up 10.1% from a year ago when the company reported earnings of $3.28 per share.

The consensus estimate is down from $3.62 three months ago, but it hasn't changed in the last month. For the fiscal year, analysts are expecting earnings of $15.13 per share.

IBM is expected to report revenue of $25.38 billion for the quarter, down by 3% from last year's figure of $26.16 billion. The anticipated revenue for the fiscal year is $105.32 billion.

Company Performance: In the second quarter, IBM broke a three-quarter growth streak with a year-over-year decline in revenue. After rising 0.3%in the first quarter, 1.6% in the fourth quarter of the last fiscal year and 7.8% in the third quarter of the last fiscal year, it fell 3.3% in the most recent quarter.

IBM is in line with the industry average with a P/E ratio of 15.2. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: Understanding The P/E Ratio

Over the past quarter, the stock price has increased from $186.01 on July 13, 2012 to $205.82. IBM's best recent streak was when its price gained $4.67 per share between September 6, 2012 and September 12, 2012.

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