EARNINGS PREVIEW: US Software Companies Expected To Get Boost From Broad Tech Spending

TAKING THE PULSE: A handful of major U.S. software firms is expected to see a lift in sales and profits from a /broad increase in technology spending across nearly all geographies and verticals. Already, business-software giant Oracle Corp. (ORCL) and smaller players, including Tibco Software Inc. (TIBX) and Progress Software Corp. (PRGS), have posted higher sales and margins in their latest quarters.

 
   COMPANIES TO WATCH: 
 
   International Business Machines Corp. (IBM) - reports April 19

Wall Street Expectations: Analysts polled by Thomson Reuters expected a profit of $2.30 a share on revenue of $24.01 billion, up from income of $1.97 a share and revenue of $22.86 billion last year.

Key Issues: IBM has benefited from heavy investments in emerging countries, as well as growth areas, such as business analytics and cloud computing. Last month, IBM touted the success of its long-term roadmap, saying the plan has helped it report record results. The first-quarter results will be the first under IBM's 2015 roadmap, which has a goal of achieving per-share operating earnings of $20 by the end of 2015.

 
   VMware Inc. (VMW) - reports April 19

Wall Street Expectations: The world's biggest computer-virtualization software company is seen earning a profit of 42 cents a share on revenue of $815 million. In the same period a year ago, VMware posted a per-share profit of 19 cents, or 32 cents excluding stock-based compensation and other items, on revenue of $634 million.

Key Issues: VMware, majority-owned by EMC Corp. (EMC), is expected to report its fifth consecutive quarter of profit growth as sales continue to benefit from strong demand for virtualization software. The company is also targeting new markets such as India, Russia and China as it seeks to lower its dependence on markets such as North America, Canada, the U.K. and Australia.

 
   Microsoft Corp. (MSFT) - reports April 28

Wall Street Expectations: The industry giant is expected to report a fiscal third-quarter profit of 56 cents a share on revenue of $16.27 billion. Last year, Microsoft posted a profit of 45 cents a share on revenue of $14.5 billion.

Key Issues: Microsoft last week said it created a partnership with Toyota Motor Corp. (TM, 7203.TO) to spread smart-car technology to 170 countries beginning next year, and earlier this year, created buzz when it announced a strategic alliance with mobile handset maker Nokia Corp. (NOK) that will make the Windows Phone 7 operating system Nokia's new smartphone standard. The company has also seen steady growth for its Bing search engine since it launched two years ago.

 
   Citrix Systems Inc. (CTXS) - reporting date to be announced

Wall Street Expectations: The company, which improves efficiency by allowing multiple systems to operate on one computer, is predicted to report a profit of 42 cents a share on revenue of $475 million. Prior-year earnings per share were 25 cents, or 40 cents excluding stock-based compensation and other items, on revenue of $414 million.

Key Issues: Citrix, VMware's key competitor, earlier this year announced three permanent XenDesktop program trade-up offers, as well as a limited-time promotion called "Trade-Up Restart," which targets customers with expired subscription advantage memberships. Investment firm Morgan Keegan last month said it believed Citrix can grow its desktop virtualization business faster than the overall market, noting the company added almost 10,000 new customers in that space last year, three times more than in 2009.

(The Thomson Reuters financial estimates and year-earlier figures may not be comparable due to one-time items and other adjustments.)

-By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com

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