Seeking Alpha

More on IBM: EPS guidance maintained, Asia-Pac sales nosedive

  • IBM is still guiding for 2013 EPS of at least $16.90 (consensus is at $16.89). Job cuts, $1.9B in buybacks (down from $3.6B in Q2), a lower tax rate (16% vs. 22% in Q2 and 24.6% a year earlier), and a 60 bps Y/Y increase in gross margin to 48% allowed Q3 EPS to beat estimates in spite of a $1B revenue miss.
  • Asia-Pac revenue -15% Y/Y, Americas -1%, EMEA +1%. Sales to BRIC countries fell 15% Y/Y., and sales to growth markets in general fell 9%.The numbers come shortly after Teradata warned of weak Asian sales.
  • Services revenue -4% Y/Y, same as Q2. Hardware is still ugly, -17% vs. -12%. Software +1% vs. +4%. Services backlog was $141B at quarter's end, flat Q/Q and +2% Y/Y.
  • IBM -5.2% AH. CC at 4:30PM ET.
  • Q3 results, PR
Comments (14)
  • There's that usual phrase to console loyal investors .
    "Excluding some Expenses"
    In other words this is NON GAAP accounting .
    Meanwhile the revenue shrinks , in any other Tech company , even AAPL that would bring the stock down just like it did with AAPL and HPQ .
    Well it looks like investors are seeing through the smoke screen and selling IBM down hard
    16 Oct 2013, 04:32 PM Reply Like
  • They should be looking at buying BlackBerry
    16 Oct 2013, 04:39 PM Reply Like
  • omg...no.
    16 Oct 2013, 08:13 PM Reply Like
  • I agree. That's one of the single worst ideas I've heard on this site for a long time.
    16 Oct 2013, 11:40 PM Reply Like
  • the best time to buy a good company is when everyone hates it. bot some IBM in the aftermarket at 175.30.
    16 Oct 2013, 05:08 PM Reply Like
  • looked through their numbers some more,decided to get out. Netted 36cts a share.
    16 Oct 2013, 07:27 PM Reply Like
  • Hahahaha. NO. IBM should figure out how to make money again. Think they are overdue for a remake. Anyone catch I'd they at least plan to buy back shares?
    16 Oct 2013, 05:09 PM Reply Like
  • IBM may have finished higher in 7 of the past 10 Q4's but its done it generating a median return less than SPY and with a standard deviation greater than the SPY..a bad combination. Consider other plays in the tech food chain like WDC instead. http://bit.ly/SbBA5p
    16 Oct 2013, 05:14 PM Reply Like
  • PC storage is a bad place to go. Anything for PCs is not going to have good margins.
    16 Oct 2013, 07:46 PM Reply Like
  • Most of the EPS growth came from margin expansion. The decline in revenue was more than made up by share buybacks. This is a cheap price to buy IBM stock.
    16 Oct 2013, 07:49 PM Reply Like
  • IBM is poorly managed is the only conclusion one can reach after 6 quarters of negative performance since the new CEO took over. They really need to rehire Palmisano before the company is destroyed.
    16 Oct 2013, 07:56 PM Reply Like
  • Before the company is destroyed?

     

    No over-reaction in that statement, huh?

     

    Basically, IBM is getting hammered in emerging markets and in Europe. The sequester isn't helping matters either. But you can look at the revenue numbers posted above and see that until the world economic recovery beefs up, IBM is going to have trouble generating profits. However, the company is still the leader in what it does. It's just not enough clients want to pay for those services right now. But to say "the company will be destroyed" is utterly ridiculous. HP and Dell and even Oracle would kill to be in the position IBM is in right now.

     

    I sold my position at $198 a couple of months ago. But it becomes very interesting under $170

     

    Just my .02
    16 Oct 2013, 11:48 PM Reply Like
  • Need to get a ceo like YHOO whose revenues keep sliding while shares continue upward
    17 Oct 2013, 06:22 AM Reply Like
  • bot in the pre-mkt at 173.24
    17 Oct 2013, 08:06 AM Reply Like
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