IBM Reports Earnings Today And Is Expected To Discuss A Huge Reorg

Today is a big day for IBM.

The company reports its fourth quarter earnings, the first one since CEO Ginni Rometty admitted she would not be keeping the promise made by her predecessor to return $20 earnings per share profit by 2015.

Expectations for the quarter are modest. Analysts are looking for $24.77 billion in revenue, down almost 11% from the year-ago quarter, and adjusted earnings of $5.41 per share. That would be IBM's 11th straight quarter without a year-over-year revenue increase.

For the year, IBM is expected to report $16.13 adjusted EPS and $93.55 billion in revenue, down about 6%, according to analysts polled by Yahoo Finance.

Some of that revenue decrease is on purpose. IBM has been selling its underperforming, less profitable units like its commodity servers (sold to Lenovo Group) and its semiconductor manufacturing operations (sold to Globalfoundries).

It's been shifting investment into growth areas like cloud computing, big data, and mobile apps (via an agreement with Apple).

But, since abandoning the $20 EPS profit, called "Roadmap 2015," CEO Ginny Rometty has not yet offered guidance on what the new profit plan or roadmap will be.

Reports are circulating that she is overseeing a huge reorganization of the company - one of the biggest re-orgs the company has ever faced, sources told Paul Kunert at the Channel Register.

Instead of separate hardware and software groups, a structure that's been in place for eons, she's reportedly creating new groups built around new business areas: Research, Sales & Delivery; Systems; Cloud; Watson; Security; Commerce and Analytics. The company will continue to operate its Global Technology Services unit.

Such a big reorg could also mean layoffs, which aren't new to IBM. It's a huge company that had over 400,000 employees worldwide in 2013 and it spent about $1 billion per year in both 2013 and 2014 on layoffs.

Then again, it's also been hiring like mad in its growth areas, and is retraining some of its employees instead of laying them off.

Things have been so rocky for IBM since October, its last earnings announcement, that when 2014 drew to a close, Big Blue was one of the worst performing stocks in the Dow Jones Industrial Average for two years running. Rivals Oracle and Microsoft are currently both more valuable than IBM, by market cap (IBM: $155.3 billion; Oracle: $191.3 billion; Microsoft: $377 billion).

So, when IBM announces earnings, investors will be expecting to hear more about Rometty's new profit targets and this reorg.