IBM -2% as $20 EPS target outweighed by cash flow questions


IBM (IBM -1.9%) execs tried to convince those at its analyst day meeting today that its business will stabilize, but apparently skepticism abounds, as shares are the weakest performer on the Dow near the close.

CFO Martin Schroeter reiterated IBM's EPS target for 2015 of “at least $20,” a matter that was scrutinized by the Street in reports leading up to the meeting.

Barclays analyst Ben Reitzes writes that the points discussed today are about as expected, but he's more concerned with cash flow than with the EPS goals; IBM's free cash flow has trended below non-GAAP EPS for the last two years, which could point toward longer term problems, and Reitzes sees $16B free cash flow guidance as challenging considering how much it must need working capital improvements to hit that figure.

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Comments (6)
  • brianhutch
    , contributor
    Comments (331) | Send Message
     
    I was wondering how IBM built up so much debt if it was so profitable
    These days of free FED money , debt does not matter anymore because
    "this time it is different" ?
    14 May 2014, 04:52 PM Reply Like
  • FrankArabia
    , contributor
    Comments (984) | Send Message
     
    I sold my last shares of IBM today.

     

    This ship is going to turn eventually, but with 400, 000+ employees, not going to be swift.

     

    They have to adapt to a new environment and that is going to be really really tough.
    14 May 2014, 06:11 PM Reply Like
  • samuraitrader
    , contributor
    Comments (883) | Send Message
     
    IBM appears to be imploding. The Roadkill to 2015 is at the root of the problem. Ginni could have changed course when she took over but c'e' la vie.
    14 May 2014, 08:15 PM Reply Like
  • Momintn
    , contributor
    Comments (6086) | Send Message
     
    When IBM hits $20 EPS can we get a list of the analysts who were wrong? That would be very interesting. If you could go ahead and question each one for the record, please do.
    19 May 2014, 10:56 AM Reply Like
  • samuraitrader
    , contributor
    Comments (883) | Send Message
     
    and when they hit $20 and the stock is heading south, then what? what's the point? time will tell. good luck.
    19 May 2014, 02:31 PM Reply Like
  • idkmybffjill
    , contributor
    Comments (1914) | Send Message
     
    An interesting piece on IBM by BusinessWeek:

     

    http://buswk.co/1k03jxe
    22 May 2014, 10:33 PM Reply Like
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