International Business Machines Corp. (NYSE:IBM) is set to release its earnings report for the three months ended September 30 on Wednesday October 16 after the market closes. Analysts appear to be expecting a mixed quarter from the company, as European demand picks up but overall business remains sluggish.


In anticipation of the earnings report, analysts studying International Business Machines Corp. (NYSE:IBM) were looking for earnings of $3.96 per share by consensus. In the same three months of 2012 the company earned $3.62 per share. Revenues in Wednesday’s earnings report are expected to come to $24.8 billion, flat from last year’s $27.7 billion.

IBM European hopes

A report on the earnings from Morgan Stanley sees some possible tailwinds for International Business Machines Corp. (NYSE:IBM). The analysts see Global Business Services revenue picking up and returning to growth as the European corporate sector continues to improve. The analysts see a “significant acceleration in consulting over the next 12 months.”

Europe is also likely to set the stage for an improvement in the company’s Global Technology Services business. Research suggests that service budgets are improving across Europe. That means that International Business Machines Corp. (NYSE:IBM) should be able to pick up some more business in the segment going forward.

On the hardware side of IBM business the analysts are less optimistic. Revenue is picking up, but it is at the expense of market share. IBM is losing out to companies like Dell Inc. (NASDAQ:DELL) in the server market meaning any gains in revenue will look poor next to share numbers.

IBM performance

International Business Machines Corp. (NYSE:IBM) stock has been blamed for the sluggish performance of the DJIA through 2013 compared to the wider market. That sluggishness was the reason for the substantial shake up of the index announced last month. IBM is still part of the DJIA, but its influence on the index’s level should be lessened.

Since January 1 shares in International Business Machines Corp. (NYSE:IBM) have fallen by just over 2.5%. It’s been an unstable year for the company, ans investors don’t seem to be sure of its growth potential going forward. Shares in the company grew slowly through 2012 after a very strong 2011.

If European enterprise spending is ready to pick up through the end of the year, investors confidence in International Business Machines Corp. (NYSE:IBM) is likely to pick up. If that doesn’t happen, however, investors in the company could be in for continued rocky periods ahead.