IBM

International Business Machines Corp. is expected to announce its first quarter 2011 results afterwards the closing bell today. Currently, estimate revisions have moved in both directions over the last few days, so we continue to expect a modest beat in this quarter.

IBM reported revenues of $4.18 in the fourth quarter of 2010, surpassing the Zacks Consensus Estimate of $4.08. Revenue increased 6.6% year over year to $29.02 billion, so then above the Zacks Consensus Estimate of $28.27 billion.

Growth was witnessed across all major markets with earnings climbing 5% at constant currency. According to management, the fourth quarter posted the best revenue growth at constant currency in nearly a decade, primarily driven by higher Hardware and Software earnings.

The developing markets comprising the BRIC nations recorded a 19% revenue growth. For furthermore details, please see IBM Beats On Strong Earnings.

The first quarter

IBM is expected to post strong revenue growth in the first quarter. Currently, the Zacks Consensus Estimate for revenue is pegged at $24.04 billion, up 5.2% year over year from $22.86 billion reported in the prior-year quarter.

We expect continued growth from emerging markets in the first quarter, particularly from the Asia-Pacific region. The company expects its served markets to grow for the moment 40% by 2015.

The first quarter

During the first quarter, IBM announced that it will invest $38.0 million to build a new Cloud Computing Data Center in Singapore, scheduled to be operational from April. IBM has 13 global cloud labs, of which seven are based in Asia-Pacific countries including China, India, Korea, Japan, Hong Kong, Vietnam and Singapore.

The investment in Singapore signifies the increasing demand for cloud solutions and services in the Asia-Pacific region. The Asia-Pacific market for cloud computing is set to grow 40% per annum through 2014 to $4.9 billion and IBM is so then placed to benefit from this growth.

However, the natural disaster in Japan is expected to impact IBM's top-line growth in the first quarter. Japan was struck by a tremendous earthquake and deadly tsunami on March 11, 2011. IBM reported that it failed to estimate the possible impact of the disaster on its operations at that time.

IBM remains focused on expanding its product portfolio and leveraging its global scale through accretive acquisitions that can be easily integrated into its current businesses.

In 2010, IBM completed 17 acquisitions, with the Software segment acquiring 13 companies, the Systems and Research segment acquiring 2 companies, and the Global Business Services and the Global Innovation Services acquiring one each. These acquisitions will boost IBM's top-line growth going forward.

The Smarter planet

We remain optimistic about IBM's long-term growth based on its growing initiatives in the Smarter planet, business analytics and optimization and cloud computing areas.

Fundamental company data provided by Capital IQ. Historical chart data and daily updates provided by Commodity Systems, Inc.. International historical chart data, daily updates, fundAnalyst estimates data provided by Thomson Financial Network. All data povided by Thomson Financial Network is based solely upon innovation information provided by third party analysts. Yahoo! has not reviewed, and by no means whatsoever endorses the validity of such data. Yahoo! and ThomsonFN shall not be liable for any actions taken in reliance thereon.