Will Solid Consulting Revenues Boost IBM's Q4 Earnings?

Core Viewpoint - IBM is expected to report higher revenues in its Consulting segment for the fourth quarter of 2024, driven by increased demand for technology consulting and business transformation services [1]. Factors at Play - The Consulting segment includes Business Transformation, Technology Consulting, and Application Operations, providing consulting and application management services that leverage industry, technology, and business strategy [1]. - IBM Consulting launched Autonomous Security for Cloud, an AI-driven solution for automating cloud security management, aimed at enhancing cloud adoption on Amazon Web Services [2]. - The capabilities of IBM Consulting Advantage have been expanded, utilizing Granite 3.0 large language models to improve clients' return on investments, with specific solutions for Business Operations and Cloud Transformation [3]. - In collaboration with Dun & Bradstreet, IBM Consulting services supported the development of a generative AI assistant, D&B Ask Procurement, powered by IBM watsonx technology [4]. - IBM formed a multi-year strategic partnership with Ferrari to enhance fan engagement and data analytics, which is expected to generate additional revenues in the Consulting segment [5]. Overall Expectations - The Zacks Consensus Estimate for Consulting revenues is $5.27 billion, up from$5.04 billion in the same quarter last year, with an estimated revenue of $5.38 billion indicating a 2$17.56 billion, compared to $17.38 billion in the prior-year quarter, with earnings expected to be$3.74 per share, down from $3.87 [7]. Earnings Whispers - IBM is predicted to likely beat earnings expectations for the fourth quarter, supported by a positive Earnings ESP of +0.31% and a Zacks Rank of 3 [8].