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What to watch for in IBM's Q2 results

The tech company's Q2 results could be impacted by these three events.

IBM share price could be impacted by three factors. Investors will see if these events will shape IBM’s Q2 earnings report and help the corporation improve upon its weak Q1 results.

IBM’s Q2 earnings could be impacted by $34 billion Red Hat acquisition

Nearly a year after IBM purchased Red Hat, the $34 billion acquisition was recently finalised. IBM hopes the software company purchase will help IBM increase its revenue in cloud technology. The companies touted the merger in a statement.

‘Together, IBM and Red Hat will accelerate innovation by offering a next-generation hybrid multi-cloud platform,’ said IBM and Red Hat in a statement.

Frank Gens, chief analyst at International Data Company, believes that the Red Hat deal being finalised will help IBM stand out among other corporations.

‘With the acquisition of Red Hat, and IBM’s commitment to Red Hat’s independence, IBM is well positioned to help enterprises differentiate themselves in their industry by capitalizing on open source in this emerging hybrid and multi-cloud world,’ said Gens.

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Vodafone’s partnership could help IBM's Q2 revenue

Vodafone recently signed a five-year deal with IBM to modernise its IT infrastructure. The Indian telecommunications company previously had a deal with IBM in January. Greg Hyttenrauch, co-leader of the Vodaphone/IBM venture, noted that the deal would help both corporations expand artificial intelligence (AI) technology.

‘By providing the open cloud, connectivity and portable AI technologies that companies need to manage data, workloads and processes across the breadth of their IT systems, Vodafone and IBM are helping to drive innovation and transform user experiences across multiple industries – from retail to agriculture,’ said Hyttenrauch.

The partnership could help IBM’s Q2 results as the corporation attracts companies wanting to improve their multi-cloud technology.

Restructuring could affect IBM’s Q2 profits

IBM recently laid off 1700 employees as the company had declining sales in its equipment services division. An IBM spokesperson said the layoffs and addition of 25,000 new positions were meant to change the company's focus to IT.

‘We are continuing to reposition our team to align with our focus on the high-value segments of the IT market, and we also continue to hire aggressively in critical new areas that deliver value for our clients and IBM,’ said the IBM spokesperson.

Investors will see if investing in cloud computing and major acquisitions will help IBM's Q2 earnings.

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