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Computer industry

Zacks Equity Research Highlights Key Takeaways from International Business Machines Corp. and Scientific Games Corporation

Strategic Insights

— 1 min read

International Business Machines Corp. (IBM), a global technology and consulting company, is set to release its fourth-quarter 2009 earnings on January 19. Analysts expect IBM's earnings to continue its historical trend of surpassing the Zacks Consensus Estimate, with the company raising its guidance for fiscal 2010. However, the overall demand environment may limit the stock's near-term performance, and IBM faces competition from companies like Hewlett-Packard Co. (HPQ), Cisco Systems Inc. (CSCO), and Dell Inc. (DELL). Meanwhile, Scientific Games Corporation (SGMS) has been awarded a five-year contract by the Sachsische LOTTO-GmbH in Germany to supply instant tickets and cooperative services, further validating the company's growing international expansion efforts.

Key Takeaways:

  • IBM is expected to release its fourth-quarter 2009 earnings on January 19, with analysts anticipating earnings to surpass the Zacks Consensus Estimate.
  • The company has a history of raising its guidance for fiscal 2010, with management targeting an EPS of $10 to $11 for the year.
  • IBM expects to return to revenue growth in the fourth quarter, with strong demand expected in the software and services businesses.
  • The company's guidance for fiscal 2010 may drive the stock price, but the overall demand environment may limit near-term performance.
  • IBM faces competition from major IT companies, including HPQ, CSCO, and DELL.
  • Scientific Games Corporation (SGMS) has been awarded a five-year contract by the Sachsische LOTTO-GmbH in Germany to supply instant tickets and cooperative services.
  • The contract, valued at five years, marks the sixth cooperative services contract won by SGMS in Germany, further validating the company's growing international expansion efforts.
  • SGMS has a strong presence in the worldwide instant ticket and online lottery markets, with significant in-roads into international markets traditionally dominated by GTECH Holdings Corporation.

Statistics:

  • Zacks Consensus Estimate for IBM's fourth-quarter 2009 earnings: $3.47 per share.
  • IBM's target EPS for fiscal 2010: $10 to $11.
  • IBM's expected 2009 pre-tax income for its software and services businesses: around $8 billion.
  • Number of publicly traded stocks covered by Zacks Equity Research: 1,150.
  • Six-month target period for Zacks Equity Research recommendations: not specified.

Sources:

  • "IBM to Announce 4th Quarter Results" (Zacks Equity Research)
  • "Scientific Games Big in Germany" (Zacks Equity Research)
  • "About Zacks Equity Research" (Zacks.com)
  • "About Zacks" (Zacks.com)

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