) continued informing the tech industry's Q4 earnings after the
bell Tuesday with a mixed report: the world's largest tech
services company reported $6.13 per share, beating the expected
$6.01 per share, but reported $27.7 billion, which missed the
$28.5 billion expected by the Zacks Consensus Estimate.
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Sales are down 5.5% year over year, which adds to the the overall
Big Tech scenario that enterprises have yet to make big
investments back into technology. We saw with
) last week that this cyclical revenue growth trend looks to be
pushed out at least another quarter or two. So it seems to be
with IBM, as well.
Guidance also looks flat-to-down for fiscal 2014: the company
expects to make "at least" $17 per share for the year, where
analysts had been expecting at least $18 per share.
IBM shares are down 2+% in the after-market after initially
ticking upward. This followed a 0.87% drop in regular-day trading
Tuesday in anticipation of the Q4 earnings report. Again, this
follows the narrative that the tech industry is going to have to
wait a little while longer (at least) to find a little traction.
Because Tech and Finance make up such a substantial part of the
U.S. economy and both report in the earlier stages of earnings
season, we tend to bend a bit toward the results in these
industries early on. And while the overall economy is expected to
pick up meaningfully in 2014, either we will see marked
improvement elsewhere as earnings season moves along -- including
Big Tech companies yet to report, like
), and many others -- or we will need to push out our growth
expectations to the next three months and possibly beyond.
Near-term, IBM is trading down, and Tech is following Finance
with a mildly disappointing Q4 overall. Let's see if there may be
some diamonds in the rough in other reports this week.