Will IBM's earnings rebound after Q3 2024 dip?

**IBM's earnings are expected to rebound after the Q3 2024 dip.** Here's a detailed analysis to support this conclusion: 1. **Analyst Expectations and Historical Performance**: Analysts at Zacks Research have raised their Q3 2024 earnings estimates for IBM, expecting the company to post earnings per share (EPS) of $2.25 for the quarter, up from their prior estimate of $2.20. This indicates a positive outlook for IBM's earnings in the immediate term. |code|Ticker|Name|Date|Net Income YoY|Net Income|market_code| |---|---|---|---|---|---|---| |IBM|IBM.N|IBM|2023 Q4|21.28365916635928|3.288E9|169| |IBM|IBM.N|IBM|2024 Q1|73.13915857605178|1.605E9|169| |IBM|IBM.N|IBM|2024 Q2|15.855969677826911|1.834E9|169| |IBM|IBM.N|IBM|2024 Q3|-119.36619718309859|-3.3E8|169| 2. **Recent Performance and Surprises**: IBM has a history of surpassing earnings expectations. For instance, in Q2 2024, the company reported EPS of $2.43, beating the Zacks Consensus Estimate of $2.16 by $0.27. This trend of exceeding expectations suggests that IBM's earnings may continue to rebound as long as the company meets or exceeds market expectations. 3. **Revenue Growth and Market Position**: IBM's revenue has shown a year-over-year increase of 1.9% in Q2 2024, reaching $15.77 billion, compared to the consensus estimate of $15.58 billion. The company's strong revenue growth, coupled with its leading position in hybrid cloud and AI solutions, positions it well for continued financial performance. 4. **Dividend Yield and Investor Confidence**: IBM's dividend yield is 3.53%, indicating a stable and attractive return for investors. The company's consistent dividend payments and strong market presence can bolster investor confidence, potentially leading to increased investment and a rebound in earnings as the company grows. 5. **Strategic Initiatives and Future Outlook**: IBM's strategic focus on AI and hybrid cloud solutions is expected to drive future growth. The company's innovative platforms, such as Watsonx, are likely to generate incremental revenues, supporting a rebound in earnings as these initiatives mature. In conclusion, while IBM experienced a dip in earnings in Q3 2024, the company's recent positive earnings surprises, revenue growth, strong market position, and strategic initiatives suggest that its earnings are poised for a rebound in the coming quarters.