Following is an excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):
IBM's Net Rises 11%, But Contract Signings Slip
Summary: International Business Machines Corp. (NYSE:IBM) reported net earnings of $2.2 billion, up 11% from the year earlier period. EPS came in at $1.30 -- 1 cent above estimates. Share prices responded positively to the news, increasing nearly three-quarters of a percent during trading before the announcement yesterday, then getting another 1.5% boost in after-hours trading. The increase in net earnings resulted mainly from an increase in software sales. IBM reported a revenue increase of 45% in their semiconductor division, largely on video game console chip sales. However, there was also cause for concern with contract signing falling significantly. Long-term deals faired the worst during this past quarter, coming in at just $4.6 billion -- only half of what they were a year ago. Since contract signings are one of the best predictors of future revenue, there is concern that IBM is gradually losing market share in this increasingly competitive market.
Comment on related stocks/ETFs: For more in-depth coverage of IBM's most recent quarter, see the company's conference call transcript now available at Seeking Alpha.