IBM share price: 4 things to watch for in Q1 results

The tech company has to deal with these four vital issues before its next earnings report.

IBM logo before Q1 earnings Source: Bloomberg

International Business Machines (IBM) has had a positive year so far on The Dow Jones and had a better-than-expected Q4 2018 earnings report. Now the tech company has to answer these four pivotal questions before IBM’s Q1 earnings report.

Will IBM’s Q1 revenue rise after leading the Dow?

The tech company has been leading the Dow Jones for most of 2019. The corporation’s tech dominance in international credit card transactions have helped the company’s share price rise. Despite the positive performance of IBM stock for the first three months of the year, Wall Street analysts will closely monitor IBM’s Q1 earnings to see if the corporation’s profits will reflect the increased stock performance.

Was the acquisition of Red Hat positive for IBM's Q1 profits?

IBM’s Q1 profits could be influenced by the $34 billion acquisition of open-source software company Red Hat in 2018. David Simpson, vice president of cloud services, said Red Hat and IBM would make ideal partners in technology.

‘Red Hat and IBM are partners rather than competitors and work together on the open source Linux software platform,’ said Simpson.

Though shareholders have approved the merger, the purchase is not expected to be complete until later in 2019. There is also concern about antitrust violations from the European Commission, according to sources close to the company on TechWire’s website.

IBM’s upcoming merger with Red Hat may strengthen its position in cloud services and could mean growth in IBM’s Q1 profits.

Could losing a lucrative government contract affect IBM'S Q1 earnings?

IBM’s Q1 revenue may also be impacted by its protest of the US Department of Defence only using one tech company for a contract. The corporation filed a complaint before the Defence Department excluded the company from a contract for its cloud services. Sam Gordy, IBM Federal’s general manager, said that the government program, JEDI, should use multiple vendors.

‘JEDI’s primary flaw lies in mandating a single cloud environment for up to 10 years. Leading global enterprises want clouds that are flexible, provide access to the best applications from multiple vendors, and can smoothly transition legacy systems. JEDI is a complete departure from these best practices,’ said Gordy.

IBM’s Q1 profits could be impacted by the loss of the contract to competitors like Amazon and Microsoft.

Could blockchain help IBM's Q1 profits?

IBM’s blockchain technology could drive IBM’s Q1 earnings. The company’s digital payment system wants to simplify the financial settlement process between international businesses. The World Wire service has already launched in 72 countries as a global payment system for financial institutions. IBM blockchain general manager, Marie Wieck, touted the blockchain as an innovation in finance.

‘We’ve created a new type of payment network designed to accelerate remittances and transform cross-border payments to facilitate the movement of money in countries that need it most. By creating a network where financial institutions support multiple digital assets, we expect to spur innovation and improve financial inclusion worldwide,’ said Wieck.

IBM’s Q1 earnings may be affected by these important factors. Financial experts monitor IBM’S Q1 revenue to see if the tech company will exceed their expectations.


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Bid
Offer
Updated
Change
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
China 300
-
-
-
-

Prices above are subject to our website terms and agreements. All share prices are delayed by at least 20 minutes. Prices are indicative only.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.