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On Monday 20 October 2014, IBM will be posting its third-quarter figures. Adjusted earnings per share are called in at $4.319, in line with the previous quarter, and sales are called to be fractionally worse at $23.415 billion. The company’s pre-tax profits are called at $5.378 billion. When looking back at previous performances it is worth remembering that this company has only failed to beat quarterly expectations once since 2005.
The increasing volumes of information being generated by the use of mobile devices and social media has led IBM to assess that the data capture and analysis could see sales from this area alone reach $20 billion by 2015. They also envisage that the total sector by 2017 could be worth $266 billion, and have accordingly decided to focus a sizeable workforce in this direction.
Back in 2011 Watson was entered into the US quiz show Jeopardy. Since that successful appearance it has taken IBM some considerable time, effort and money to bring this project forward to a stage where it is able to monetise. It is believed that IBM will use these figures as the platform to do just that.
So far 2014 has not been a great year with the share price down 0.6%, and since January 2013 the share price is now almost 4.25% lower. These quarterly figures could finally offer the markets a clear picture of where IBM is going. The 50-, 100- and 200-day moving averages are all converging around the $188.50 region. A break above here could be the move needed to remedy the last two years of shareholder disappointment.