IBM Beats Earnings, Misses Revs - Analyst Blog

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IBM Corp. ( IBM ) 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.

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 Intel ( INTC ) 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 Google ( GOOG ), Apple ( AAPL ), Microsoft ( MSFT ), 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.



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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: AAPL , GOOG , IBM , INTC , MSFT

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