IBM Earnings Preview

Investors are expecting a strong quarter from IBM with double-digit earnings growth anticipated.

IBM (IBM: 191.74 -0.72%) is scheduled to report their second quarter 2010 results after the market closes on Monday, July 19.

IBM has delivered higher-than-expected earnings results each of the past ten quarters. Last quarter, the tech giant reported earnings results that were $.04 above Wall Street’s consensus estimates. However, IBM shares fell 2% the next day as investors were hoping for stronger results.

The current Wall Street consensus estimates are for revenues of $24.22 billion and EPS of $2.58. This would imply a 4% increase in revenues over last year’s $23.25 billion. However, analysts also expect profits to increase by 11%. 

IBM’s stock price is basically unchanged from where it started the year. That has allowed the stock to outperform the 3% decline in the S&P 500 index. Last year IBM shares soared 55% as they outpaced the 23% gain in the S&P 500.

IBM stock is currently trading at 10x consensus 2011 EPS estimates. IBM will likely deliver another strong quarter, but with the stock trading near its 52-week high there may be limited upside in the near term.