IBM’s results a gauge of tech-buying mood in 3Q

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SAN FRANCISCO (AP) — IBM Corp. is scheduled to report its third quarter earnings Monday, Oct. 17, offering a glimpse into the dynamics of the corporate technology-buying world at an uncertain time for the world’s economies.

WHAT TO WATCH FOR: New services contract signings. Analysts have been worried about IBM’s ability to bring in new deals in a choppy economy, and this figure has fluctuated. It rose in the second quarter, following a dip in the first, providing some assurance to investors. IBM stresses that the company’s overall backlog of deals matters more. The backlog stood at $144 billion at the end of the second quarter.

Also, watch for whether IBM increases its guidance again. IBM consistently raises its guidance, and needs to in order to meet its goal of $20 per share in operating earnings by 2015. Because of that target, the company’s guidance bumps don’t have the same element of unexpected surprise as they do at other companies. They’re now seen as important milestones on the march toward meeting the goal.

Nevertheless, IBM’s profit target is seen as aggressive but the Armonk, N.Y.-based company has built up goodwill among many investors for its sound results even during the worst of the Great Recession.

WHY IT MATTERS: IBM is the world’s largest technology-services company. Its results provide one measurement of businesses’ appetite for technology spending.

WHAT’S EXPECTED: Analysts polled by FactSet expect that IBM will have earned $3.21 per share, excluding items, on $26.11 billion in revenue.

LAST YEAR’S QUARTER: In the third quarter of 2010, IBM earned $3.59 billion, or $2.82 per share, on $24.27 billion in revenue.