Ginni Rometty, CEO of IBM on Mad Money to discuss IBM’s acquisition of Redhat. 

Adam Jeffery | CNBC

IBM will report second-quarter earnings after market close on Wednesday.

Here are the numbers to watch:

  • Earnings: $3.07 per share, excluding certain items, as expected by analysts, according to Refinitiv.
  • Revenue: $19.16 billion as expected by analysts, according to Refinitiv.

Analysts expect revenue to decline on an annualized basis for the fourth quarter in a row. IBM’s revenue fell 5% year over year in the first quarter.

IBM’s biggest business segment, Global Technology Services, which includes technology support services as well as infrastructure and cloud services, is “declining ~3% as the company repositions this portfolio for higher profitability and growth,” Stifel analysts led by David Grossman wrote in a July 9 note. “Declines are likely to remain at these levels through most of this year as the company exits lower margin capital intensive business and culls low growth/margin relationships from the portfolio.”

In the second quarter IBM announced a partnership with Cloudera and the sale of commerce and marketing software properties to funds advised by affiliates of Centerbridge Partners. The company also announced layoffs.

IBM closed its $34 billion acquisition of Red Hat earlier this month.

“Earlier in July, we reduced our EPS estimates while noting the risk that management might need to walk back its EPS expectations,” Argus Research analyst Jim Kelleher wrote in a note distributed to clients on Thursday. “Even with the Red Hat acquisition, we remain concerned that IBM may have lost momentum in its strategic transformation.” Kelleher has a hold rating on the stock.

With respect to guidance, analysts polled by Refinitiv expect full-year earnings of $13.90 per share, excluding certain items.

IBM shares are up about 26% since the beginning of 2019.

Executives will discuss the results with analysts on a conference call at 5 p.m. Eastern time.

This is breaking news. Please check back for updates.

WATCH: CEO Ginni Rometty: ‘Red Hat is a play that helps all of IBM’



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