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Earnings on Tap: IBM, Intel, Yahoo

IBM and Intel are chugging along, but Yahoo has to effect a turnaround.

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Tech giant  International Business Machines (IBM) will report first-quarter earnings after market close Tuesday, and investors will be hoping for a repeat of last year's performance when the company raised full-year estimates.

The consensus is for IBM to earn $2.66 per share share compared with $2.41 a share (excluding mostly acquisition-related charges) in the year-ago period.

Strong earnings recently from 
Oracle (ORCL) and 
Accenture (ACN) along with an upbeat outlook all point to another good quarter from IBM, one of the most consistent performers among its peers. Worth noting is the fact this will be the first quarter under the management of new CEO Virginia Rometty.

After a 10% year-to-date gain in its share price, the stock is trading above Morningstar analyst Sunit Gogia's fair value estimate. However, Gogia says the fair value estimate could rise if the company is able to increase margins from its global services business.

Also reporting after the bell Tuesday, chipmaker  Intel (INTC) is expected to post earnings of $0.50 per share compared with $0.56 a share in the previous corresponding quarter.

Although sales are expected to be good following a nearly 2% rise in first-quarter PC shipments, according to research firm Gartner (IT), investors will also want to know when the company expects the new Romley chip for advanced servers as well as the first chips built on the smallest-ever 14-nanometer technology.

Morningstar analyst Andy Ng thinks server processors could be a key growth driver for Intel in the years ahead but expects a blip this year with a 2% drop in revenue.

After a 17% year-to-date gain in its share price, the stock is at its 52-week highs and looks fairly valued.

 Yahoo (YHOO) is the third major tech firm reporting first-quarter earnings after the bell Tuesday, and all eyes are set on the company's new CEO Scott Thompson and how he plans to turn around the beleaguered company.

Wall Street analysts forecast earnings of $0.17 per share compared with $0.23 a share last quarter. The company had reported earnings of $0.17 per share in the first quarter a year ago.

Earlier this month, the Internet giant slashed 2,000 jobs amounting to 14% of its workforce in a bid to cut costs and announced a reorganization of operations into three separate groups: consumer, regions, and technology. Investors will seek more clarity on the restructuring, its possible impact, and the overall strategy from the new CEO.

Yahoo's stock is down more than 8% year to date, and Morningstar analyst Rick Summer holds a cautious stance on the stock. He recommends waiting for some early signs of a turnaround before considering it as a core holding.

Rouhan Sharma does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.