More Videos
- 3D's Tipping Point and Your Living Room
- Silicon Valley and Hollywood Now Fast Friends
- HP Comes in As Expected; Is It Time to Buy?
- Apple Comes to AT&T's Rescue
- My Top 10 Tech Toys for the Holidays
- iPhone a Better Gaming Platform Than Android?
- Dell Has Some Explaining to Do
- Dell May Start to Show Some Promise
- Has Twitter's Finest Hours (Seconds) Come and Gone?
- Intel's Andy Bryant Offers An Explanation
MOST SHARED
- Garlic Price Rises Surpass Gold, Stocks in China
- New-Home Sales Jump 6.2% To Highest Level in Over Year
- S&P Stocks Trading at New 52-Week Highs
- US Plans to Reduce Emissions By 17% Within Next Ten Years
- Judge Erases Couple's $525,000 Mortgage Payment
- The Executive Job Search
- Where Do Pardoned Turkeys Go?
- Salvation Army's Kettles Now Credit Card-Ready
- US Mint to Suspend American Eagle Gold 1-Ounce Coins
- Activision Prepares to Double Dip on ‘Modern Warfare 2’
- 4 Thanksgiving Week Buys For Your Portfolio: Market Pros
- There's a 'Great Chance' For a Double-Dip Recession: Strategist
- Revenge of the Gangsta Nerds
- Will TCU See The "Flutie Effect?"
- Retail Earnings and Sales to Improve in Q4: Analyst
- Consumers Catching the Holiday Spirit
- It's Beginning To Look A Lot More Riskless
- Crescenzi: Claims Level Suggests End to Job Losses
- Hedge Funds Take Early Lead in Warren Buffett's 'Big Bet'
- AIG, Ex-CEO Greenberg Reach Pact to Settle Disputes
- Bank of America CEO Search May Extend Into 2010
- 'Cancer of Fraud' Permeates Health Care System: Critics
- US Mint to Suspend American Eagle Gold 1-Ounce Coins
- Judge Erases Couple's $525,000 Mortgage Payment
- For Many in US, It Will Be a Scaled-Down Holiday Season
- Where Do Pardoned Turkeys Go?
- Jobless Claims Below 500,000, Durable Orders Slip
- Activision Prepares to Double Dip on ‘Modern Warfare 2’
RSS FEED
Tech Check
Text Size 
 |
Analysts are looking for $1.66 a share on $22.55 billion. Most analysts I'm talking to say if IBM merely reiterates the anticipated $9.20 a share in full-2009 earnings, that could be taken as a bullish sign not just for the company, but indeed broader tech, particularly Hewlett-Packard and Microsoft (which reports its earnings on Thursday.)
Investors are feeling increasingly optimistic about enterprise spending, especially after Oracle's far more rosier than expected earnings last month. The good news about IBM though is that even if IT spending continues to slow, or stay stable, the company's services division is still its bread-and-butter, and those contract fees don't go away.
At the same time, IBM is clearly in the hunt to bolster its server business, whether the Sun deal is there or not. A higher bid is still possible, but highly unlikely since both Oracle and Sun's boards have approved their proposal. IBM will likely have to do something to answer the deal, and some believe the company can make a play for NetApp or Red Hat, or even both. The server industry will generate $100 billion in revenue this year, even amid an IT spending decline, and IBM is doing what it can to gain ground against HP.
There's no question that losing the deal with Sun hurts IBM, and its shares have performed competitively against the broader markets since those March 9 lows, up around 20 percent. Further, shares have been getting killed over the past year, along with everybody else.
In fact, noted anti-trust expert Gary Reback, the author of a new book called "Free the Market," tells me that the regulatory issues facing IBM's interest in Sun don't exist for Oracle, and it gets to eliminate the competitive threat from MySQL, even if it Oracle is forced to spin off the division. It's a brand new approach to vertical integration, something IBM might have hoped to achieve, but blew the opportunity.
This will all come down to guidance, and for investors it's all about who you believe: Is Oracle's outlook more accurate than say Intel's when it comes to what to expect from IBM? Are hardware sales finally at a bottom and can software sales and services offset sluggishness there?
IBM's cost-cutting has been effective, and operationally it compares with the strict bottom-line and margin attention at HP. If this company can beat and meet, these shares might be on the verge of break-out, along with the rest of the sector. More likely, however, is a slight beat and cautious optimism about the rest of 2009. That should keep shares in a narrow range.
Anything more or less could mean some big volatility when these numbers hit the tape.
Questions? Comments?
Data is a real-time snapshot *Data is delayed at least 15 minutes