IBM Ushers In Q3 Results With A Preferred Lens For Investors

International Business Machines Corp. IBM is scheduled to report its third-quarter results on Monday after the market close.

In an email sent to Benzinga, IBM offered several snippets and pieces of information it wants to make clear to the Street ahead of the earnings print.

EPS And Revenue

Wall Street analysts are expecting IBM to earn $3.23 per share on revenue of $19 billion in the third quarter.

Over the past three quarters, the company's top and bottom line came in ahead of what analysts were expecting. IBM noted that that this came at a time when it is working through a "massive transformation" toward a "cognitive solutions and cloud platform company."

Foreign Exchange

IBM noted that based on current exchange rates, it expects currency to benefit third-quarter revenue growth by less than 1 percentage point.

Strategic Look

IBM said that investors should pay attention to what the company is doing in its "strategic imperatives." The company will report on how several strategic areas have performed over a trailing 12-month period when it first invested $5 billion.

Related Link: Credit Suisse's "Below-Consensus" IBM Estimates

"IBM has forecasted that 40 percent of IBM's business will be in these emerging growth areas (cloud, analytics, security, and social and mobile technologies) by 2018," the company said in its email. "They were 22 percent of IBM revenues two years ago, when IBM began its turnaround under Ginni's new strategic direction."

These strategic imperatives accounted for 22 percent of IBM's revenue two years ago, and following its most second-quarter earnings report, the metric improved to 38 percent of IBM's total revenue.

Some metrics IBM included in its e-mail include: 1) the cloud business grew 30 percent in the second quarter, 2) IBM is the largest analytics provider in the industry and is led by Watson, 3) IBM has opened 48 cloud data centers across the world, and 4) cloud represents a larger percentage of IBM's revenue compared to Microsoft Corporation MSFT, Amazon.com, Inc. AMZN and Oracle Corporation ORCL.

Other Areas Of Growth

Since the start of 2015, IBM has acquired 26 companies, one of the most recent being Promontory Financial Group. IBM will add Watson's capabilities to the area of regulatory compliance and risk management.

The company is also investing in blockchain technologies, the IoT (Internet of Things) business and other areas of growth include areas where the company can leverage its technology in non-traditional sectors such as healthcare.

IBM will also talk about its partnering strategy, including a notable agreement with Apple Inc. AAPL to "transform the nature of work."

Shareholder Friendly Activities

Finally, IBM will talk about the cash it returned to shareholders through dividends and stock buybacks.

The company has not missed a quarterly dividend payment since 1916 and its dividend yield stands at around 3.6 percent. In fact, even after spending more than $12 billion CAPEX, acquisitions and R&D throughout 2015, the company returned $4.9 billion to shareholders in the form of dividends and bought back $4.6 billion worth of its own stock.

"We've paid quarterly dividends for 100 straight years, which shows that IBM understands transformation," the email concluded. "We've done it before, and the company is transforming again to take advantage of the growth markets of the future, from AI and analytics to cloud and security."

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