Revenues of $19.28 billion fell short of the Zacks Consensus Estimate of $19.64 billion while declining about 13.9% on a year-over-year basis. In the quarter, IBM reported adjusted earnings of $3.34 per share, which actually beat the consensus estimate by 4 cents. Corporate buyers increasingly are turning to low-priced hardware and cheap cloud computing services delivered via the Internet. China was the worst hit of the lot as sales fell 17 percent. Excluding currency fluctuations and divested businesses, revenue fell 1%.
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The company’s total gross profit margin from continuing operations was 48.9 percent in the 2015 third quarter compared with 48.6 percent in the 2014 third quarter. The Company operates in five business segments: Global Technology Services (NYSE:IBM), including Tactical Outsourcing, Integrated Technology Services, Cloud and Technology Support Services, and also supplies information technology (IT) infrastructure and business process services; Global Business Services (GBS), which offers its services across Consulting and Systems Integration, Global Process Services and Application Management Services; Applications, which includes middleware and operating systems applications; Systems and Technology (STG), which supplies infrastructure technologies, and Global Financing, which provides financing options for products or services which are critical to the end users’ business operations. Global Financing segment revenue shrank 8 percent to $0.4 billion for the quarter. “We’ve got weakness in Asia, we’ve got a few weakness in parts of Europe”. So I think IBM’s a flawless example.
IBM’s stock price has made a short-term (possibly long term) bottom on the YearlyS1 pivot.
“They want the most contemporary and globally enabled platforms so the mainframe continues to do well”.
IBM(NYSE:IBM) announced the earnings results for Fiscal Year 2015 and Q3. That compares with analysts’ average projection for a profit of $15.68 and IBM’s previous outlook for $15.75 to $16.50.
IBM chief executive Virginia Rometty (left) shrugged off the weak results, stressing that the company’s shift to a new business model would take time to execute.
Revenues from the company’s strategic imperatives – cloud, analytics, and engagement – increased 17 percent year-to-year and increased 20 percent year-to-date. The company’s strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations and expanding profit margins. “This is how we transform from one era to the next”. This has tested patience while investors remain hopeful that IBM can reinvent itself with a focus on growing their cloud and data/analytics businesses. Operating systems revenues of IBM fell 14 percent to $0.4 billion.
IBM is still on track for the most part – and over the next three to four years, the strategic imperatives will eclipse the legacy businesses, said Bill Kreher, an analyst at Edward Jones & Co., referring to IBMs new businesses. Societe Generale cut their price objective on global Business Machines Corp. from $148.00 to $140.00 and set a sell rating for the company in a report on Tuesday.
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Though not in the same league as Microsoft, IBM has reported a tremendous growth in its cloud revenues.
