Will Solid Consulting Revenues Boost IBM's Q4 Earnings?

International Business Machines Corporation IBM is scheduled to report fourth-quarter 2024 earnings on Jan. 29, after the closing bell. In the to-be-reported quarter, the company is likely to have recorded higher revenues from the Consulting segment backed by rising demand for technology consulting and business transformation services.Find the latest EPS estimates and surprises on Zacks Earnings CalendarFactors at PlayThe Consulting segment comprises Business Transformation, Technology Consulting and Application Operations. It provides consulting and application management services that offer value and innovation to clients by leveraging industry, technology and business strategy, and process know-how.During the quarter, IBM Consulting introduced Autonomous Security for Cloud, an AI-powered solution that effectively automates the cloud security management process through continuous monitoring, proactive threat mitigation and adjustments. The solution aims to accelerate the enterprise’s cloud adoption journey on Amazon Web Services environments.IBM has expanded the capabilities of its AI-powered delivery platform, IBM Consulting Advantage. The solution uses IBM’s latest Granite 3.0 large language models and empowers IBM consultants to maximize clients’ return on investments. The company has launched IBM Consulting Advantage for Business Operations to support enterprises in improving their HR, finance and procurement processes through AI. It also introduced IBM Consulting Advantage for Cloud Transformation and Management to support clients’ cloud transformation process.In the to-be-reported quarter, Dun & Bradstreet, a leading provider of business decisioning data and analytics, has developed a generative AI assistant called D&B Ask Procurement in collaboration with IBM. IBM Consulting services have supported the development of AI tools, which are powered by IBM watsonx Orchestrate and watsonx.ai technology.IBM entered into a multi-year strategic partnership with the prominent luxury sports car manufacturer Ferrari. Per the deal, IBM will become the official Fan Engagement and Data Analytics Partner of Ferrari and develop an enhanced mobile application for the car maker. By combining its technology and consulting expertise with Ferrari’s extensive data, IBM’s mobile application will boost the experience of racing enthusiasts by offering personalized contents, custom insights and various innovative features. These are likely to have generated incremental revenues in the Consulting segment.Overall ExpectationsThe Zacks Consensus Estimate for Consulting revenues is pegged at $5.27 billion, indicating an improvement from $5.04 billion in the year-ago quarter. Our estimate for revenues from Consulting is pegged at $5.38 billion, suggesting a 2% improvement year over year.The Zacks Consensus Estimate for total revenues for the company stands at $17.56 billion. It generated revenues of $17.38 billion in the prior-year quarter. The consensus mark for earnings is currently pegged at $3.74 per share, indicating a decline from $3.87 in the year-earlier quarter.Earnings WhispersOur proven model predicts a likely earnings beat for IBM for the fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is exactly the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.IBM has an ESP of +0.31% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.International Business Machines Corporation Price and EPS Surprise International Business Machines Corporation price-eps-surprise | International Business Machines Corporation QuoteStocks to ConsiderHere are some companies you may want to consider, as our model shows that these, too, have the right combination of elements to post an earnings beat this season:PayPal Holdings, Inc. PYPL is scheduled to report quarterly numbers on Feb 2. The Earnings ESP for the company is +0.84% and it carries a Zacks Rank of 3 at present.The Earnings ESP for Qualcomm Technologies, Inc. QCOM is +3.34% and it carries a Zacks Rank of 2 at present. The company is scheduled to report its quarterly numbers on Feb. 5.The Earnings ESP for Charter Communications CHTR is +1.92% and it carries a Zacks Rank of 3 at present. The company is scheduled to report its quarterly numbers on Jan  31.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report QUALCOMM Incorporated (QCOM): Free Stock Analysis Report International Business Machines Corporation (IBM): Free Stock Analysis Report Charter Communications, Inc. (CHTR): Free Stock Analysis Report PayPal Holdings, Inc. 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