IBM is scheduled to release its next earnings report tonight after closing bell, and consensus suggests earnings of $2.09 per share and revenue of $18.3 billion. In last year’s March quarter, the tech giant posted earnings of $2.91 per share and $19.6 billion in sales.

IBM

Mixed analyst reviews of IBM

IBM shares have rallied handily this year, but Credit Suisse analysts warned against jumping in, reiterating their Underperform rating and $110 per share price target, said 24/7 Wall Street. Credit Suisse said there’s a lot of internal turmoil at the company and that they believe it is in an overall state of decline rather than transition, as others who are more positive on its future believe. They see cloud as being a big problem and add that management’s restructuring efforts have left something to be desired.

Stifel analysts have a brighter view on the company with a Buy rating and a recently increased price target of $165 per share. Merrill Lynch is also on the bullish side as their monthly RIC Report named IBM a winner due to its success in healthcare technology, 24/7 Wall Street also noted. The company also won a partnership with Apple, which should help bolster growth as well, and it’s working on a supercomputer to guard nuclear weapons in the U.S.

IBM’s segments in focus

The Wall Street Journal describes IBM as “a company in transition,” noting that its main hardware, software and services businesses are all declining and that it’s seeking new areas of growth in the cloud, data analytics, security and other services. Management’s guidance with last year’s earnings report was surprisingly bearish for this year as they now expect $13.50 per share in earnings. Tonight’s earnings report will give some key hints into whether the company is on track for this low guide.

IBM is spotlighting its Cognitive Solutions business to demonstrate to investors how it is beginning to be successful with its transition efforts. Its Watson data analytics software is a big chunk of this segment. Tonight’s report will be the first which includes this segment broken out, noted The Wall Street Journal.

The company’s hardware business is expected to continue its decline, although last year’s March quarter saw a 30% increase in sales, mostly due to its new mainframe computer lineup. As a result, the business faces a difficult year over year comparison. Previous software chief Steve Mills, who was with the company for decades, left at the end of the year, so tonight’s report will also show how IBM is doing without him heading up this struggling business.

IBM shares edged higher 0.38% to $152.30 per share in afternoon trades today.