Seeking Alpha

International Business Machines Corporation (IBM)

  • Mon, Jul. 20, 5:39 PM
    | Mon, Jul. 20, 5:39 PM | 10 Comments
  • Mon, Jul. 20, 4:38 PM
    • IBM has sold off to $165.64 AH after posting mixed Q2 results and affirming its full-year EPS guidance.
    • Cost cuts helped IBM beat EPS estimates in spite of a revenue miss: SG&A spend fell 7.4% Y/Y to $5.18B, and R&D spend 4.5% to $1.36B. Also helping: Gross margin (non-GAAP) rose 20 bps Y/Y to 50.9% (in spite of a 10% Y/Y revenue drop for continuing ops), and $1.1B was spent on buybacks.
    • Free cash flow (exc. financing receivables) rose 13% Y/Y to $3.37B. Big Blue now expects a "modest increase" in FCF this year vs. prior guidance for flat growth.
    • Segment performance: Global Tech Services revenue -10.6% Y/Y to $8.3B; op. profit -25.2% to $1.2B. Global Business Services -11.9% to $4.5B; op. profit -35.3% to $656M. Software -10.1% to $6.6B; op. profit -15.3% to $2.3B. Hardware (affected by x86 server unit sale) -32.4% to $2.2B; op. profit +26.2% to $255M; Global Financing -0.6% to $1.2B; op. profit +3.5% to $613M.
    • Geographic performance: Americas revenue -8% Y/Y to $9.8B; EMEA -17% to $6.6B.  Asia-Pac -19% to $4.3B. BRIC markets -35%. Forex had a 9% impact on total revenue growth.
    • Other details: The quarter-ending services backlog was $122B, up $1B Q/Q and down $14B Y/Y. Middleware revenue -7% Y/Y; mainframes +9% (upgrade cycle); Power systems -1%; storage -10%. "Cloud delivered as a service" revenue is now on a $4.5B/year run rate, up from $3.8B/year at the end of Q1. Business Analytics revenue was up over 10% Y/Y.
    • IBM ended Q2 with $8.8B in cash, and $12.6B in non-Global Financing debt.
    • Q2 results, PR
    • Update (5:20PM ET): On its earnings call, IBM says it expects Q3 revenue to be "similar" to a Q1 level of $19.59B. Consensus is at $19.98B.
    | Mon, Jul. 20, 4:38 PM | 36 Comments
  • Mon, Jul. 20, 4:06 PM
    • International Business Machines (NYSE:IBM): Q2 EPS of $3.84 beats by $0.06.
    • Revenue of $20.81B (-14.6% Y/Y) misses by $140M.
    • Continues to expect 2015 EPS of $15.75-$16.50. Consensus is at $15.88.
    • Shares -0.6% AH.
    • Press Release
    • Update (4:56PM ET): IBM is now down 4.4% AH.
    | Mon, Jul. 20, 4:06 PM | 46 Comments
  • Sun, Jul. 19, 5:35 PM
  • Mon, Jul. 13, 6:39 PM
    • With CRAY producing 7 of the 26 new supercomputers on's June top-100 supercomputer list, the company managed to grow its top-100 share to 31% from last November's 28%, reports Stifel's Aaron Rakers. In the top-500, Cray accounted for 12 of 87 new supercomputers.
    • IBM, meanwhile, didn't add any new supercomputers to the top-100 list, leading its share within the segment to fall to 21% from 28%. Rakers also notes IBM and Lenovo (bought Big Blue's x86 server unit) only added 8 systems between them to the full list. "We believe this continues to highlight IBM and Lenovo’s competitive dislocation in the supercomputing industry."
    • Looking at the supercomputer market in general, Stifel observes deployed CPU cores and petaflops respectively rose 16.4% and 32.6% Y/Y, a pick up in growth from November's 12% and 24%, albeit down from 2013 growth rates. There are now 68 systems on the list with over 1 petaflop of performance, up from 50 last November and 37 in June 2014.
    | Mon, Jul. 13, 6:39 PM | 2 Comments
  • Thu, Jul. 9, 6:21 AM
    • IBM (NYSE:IBM) has announced a new kind of ultra-dense chip, which squeezes in four times as much computing power as the best silicon currently available.
    • The new chips will usher in the possibility of creating 7-nanometer transistors (a strand of DNA in comparison measures 2.5 nanometers in diameter).
    • IBM made the research advance by using silicon-germanium instead of pure silicon, allowing transistors to switch faster and use less power by sitting more densely on a chip.
    | Thu, Jul. 9, 6:21 AM | 34 Comments
  • Wed, Jul. 1, 10:32 AM
    • Following final approval by U.S. regulators, IBM (IBM +1%) has closed the sale of its money-losing chip manufacturing ops to GlobalFoundries, the world's second-biggest chip foundry (behind TSMC).
    • The deal was originally announced last October. Big Blue is paying GlobalFoundries $1.5B to take its chip manufacturing unit and related obligations off its hands. GlobalFoundries will be IBM's "exclusive semiconductor processor technology provider for the next 10 years."
    • In spite of the sale, IBM is still investing heavily in chip development R&D, with the idea that the designs produced will be manufactured by GlobalFoundries. Areas of interest including Power server CPUs - the CPUs are now being offered to 3rd-party OEMs, and their architecture licensed to 3rd-party chip developers - and futuristic technologies such as carbon nanotubes, graphene, and quantum computing.
    | Wed, Jul. 1, 10:32 AM | 4 Comments
  • Thu, Jun. 25, 3:39 PM
    • Box (BOX +4.7%) is strongly adding to the Wednesday gains seen after announcing a partnership with IBM that covered Big Blue's content management software, iOS apps, security tech, and Watson Analytics platform, among other things.
    • Discussing the deal with the NYT, CEO Aaron Levie called it "[Box's] most substantial partnership in the enterprise market.” He goes on to suggest IBM's analytics software will be used to analyze content stored on Box's platform, and surface important material.
    • Forrester's Cheryl McKinnon: "It ups [Box's] street cred on targeting the enterprise ... They now have access to a whole range of enterprise-grade capabilities that IBM brings on the transactional side of the house -- analytics, case management, workflow, [business process management]. For IBM, it is integration of lighter-weight document services for a new generation of email. They are looking for that fast, agile way of working."
    | Thu, Jun. 25, 3:39 PM | 2 Comments
  • Thu, Jun. 25, 3:43 AM
    • Executive compensation is generally geared toward results, but some CEOs still got massive pay packages in 2014 even though their investors didn't do so well. Notables:
    • Philippe Dauman of Viacom (VIA, VIAB) +19.2% to $44.3M (shareholder return -6.6%)
    • Jeff Immelt of General Electric (NYSE:GE) +88.4% to $37.3M (shareholder return -6.7%)
    • James McNerney of Boeing (NYSE:BA) +24.1% to $28.9M (shareholder return -2.5%)
    • Virginia Rometty of IBM (NYSE:IBM) +38.5% to $19.3M (shareholder return -12.4%)
    • James Tisch of Loews (NYSE:L) +77.6% to $10.5M (shareholder return -12.4%)
    | Thu, Jun. 25, 3:43 AM | 61 Comments
  • Wed, Jun. 24, 8:25 AM
    • IBM is partnering with enterprise cloud storage, file-syncing, and collaboration software vendor BOX to integrate Box's software and services with many of IBM offerings.
    • Among the specifics: 1) Box will be integrated with IBM's content management and enterprise social networking software. 2) The companies will make Box's content accessible to the cloud-based Watson Analytics platform. 3) Box will enable joint clients to store content via IBM's cloud infrastructure. 4) IBM's security technologies will be used to expand Box's security offerings. 5) Box/IBM will develop content management solutions for, and integrate Box's technology with, the iOS apps IBM developed with Apple.
    • The alliance fills a hole in IBM's product line - though offering standard cloud storage services, Big Blue didn't have a platform for enterprise workers similar to Box's. For Box, the deal expands the company's ecosystem and gives it a partner with huge enterprise and channel reach. It follows a narrower deal with rival Microsoft that focused on Office integration.
    • BOX +5.4% premarket to $18.50.
    | Wed, Jun. 24, 8:25 AM | 1 Comment
  • Mon, Jun. 15, 10:20 AM
    • Believing its valuation still doesn't fully reflect the competitive challenges from big data and cloud-based platforms, JMP's Greg McDowell has downgraded Teradata (NYSE:TDC) to Underperform, and set a $30 target. The data warehousing hardware/software provider has made fresh 52-week lows; shares now go for 13x a 2016 EPS consensus of $2.75.
    • Many other analysts have already argued big data/analytics platforms focused on handling massive unstructured datasets, such as Hadoop and NoSQL, are major long-term competitive threats; some have also cited Amazon's Redshift cloud-based warehousing service. Teradata has been using M&A to grow its Hadoop exposure.
    • IBM (a traditional Teradata warehousing rival) just made a big commitment to Spark, an alternative to Hadoop's MapReduce programming model that offers much faster analytics performance on account of processing data in-memory (rather than on disks), and also reduces network I/O activity. Major Hadoop distribution provider Hortonworks (HDP -1.1%), which Teradata maintains a stake in, has launched tools for running Spark via Hadoop.
    | Mon, Jun. 15, 10:20 AM | 1 Comment
  • Mon, Jun. 15, 3:06 AM
    • IBM (NYSE:IBM) has announced several initiatives related to its free big data/analytics software platform named Spark.
    • At the core of the commitment, IBM will offer Spark as a service on IBM Cloud and will donate its SystemML software to the Spark open source ecosystem.
    • According to Beth Smith, general manager of the company’s analytics division, IBM will invest "hundreds of millions a year" into the free data analytics technology.
    | Mon, Jun. 15, 3:06 AM | 7 Comments
  • Wed, Jun. 3, 1:26 PM
    • IBM (IBM +0.1%) has acquired Blue Box, a provider of managed cloud services for companies deploying private and hybrid clouds based on the open-source OpenStack cloud infrastructure (IaaS) platform.
    • Cisco (CSCO +0.1%) is buying Piston Cloud Computing, a provider of software (called CloudOS) for managing and deploying services on commodity servers running OpenStack, as well as popular big data/analytics software platforms such as Hadoop and Spark. Terms for both deals are undisclosed.
    • IBM, whose SoftLayer unit already offers OpenStack services, will use Blue Box to "help businesses rapidly integrate their cloud-based applications and on-premises systems into OpenStack-based managed cloud," and that the deal allows it to offer a remotely-managed OpenStack private cloud solution.
    • Cisco asserts Piston and its engineers will "help accelerate the product, delivery, and operational capabilities" of its Intercloud platform, which (via service provider partners) provides a network of OpenStack cloud infrastructures running on Cisco hardware and software, and within which workloads can be moved between data centers. It also expects Piston to strengthen its OpenStack private cloud offering, the fruits of last year's acquisition of private cloud services provider Metacloud.
    • IBM ended Q1 on a $3.8B/year run rate for its various "cloud delivered as a service" offerings. Synergy Research believes IBM is the third-largest player in the public/private/hybrid cloud services space, trailing Amazon (easily the market leader) and Microsoft.
    • Many tech/telecom giants have embraced OpenStack in their efforts to compete against Amazon, Microsoft, and Google's proprietary platforms. Rackspace (RAX +0.7%) remains a top independent OpenStack provider
    | Wed, Jun. 3, 1:26 PM | 4 Comments
  • Thu, May 21, 9:30 AM
    • Alongside Goldman's list of 50 stocks appearing most as top holdings at hedge funds is its list of the 50 top shorts.
    • New additions this quarter: Baxter Intl (NYSE:BAX), UPS, Marriott (NASDAQ:MAR), NextEra (NYSE:NEE), Ford (NYSE:F), National Oilwell Varco (NYSE:NOV), McDonald's (NYSE:MCD), M&T Bank (NYSE:MTB), CenturyLink (NYSE:CTL), Amgen (NASDAQ:AMGN), Pioneer Natural (NYSE:PXD), Duke Energy (NYSE:DUK), Seagate (NASDAQ:STX), AbbVie (NYSE:ABBV), Cisco (NASDAQ:CSCO).
    • The full list (in order of $ value of short interest): AT&T (NYSE:T), Disney (NYSE:DIS), IBM, Verizon (NYSE:VZ), Intel (NASDAQ:INTC), Kinder Morgan (NYSE:KMI), Exxon (NYSE:XOM), Pfizer (NYSE:PFE), J&J (NYSE:JNJ), Deere (NYSE:DE), Caterpillar (NYSE:CAT), Exelon (NYSE:EXC), GE, Boeing (NYSE:BA), Halliburton (NYSE:HAL), Fox (NASDAQ:FOXA), Comcast (NASDAQ:CMCSA), UTX, Regeneron (NASDAQ:REGN), Merck (NYSE:MRK), (NYSE:CRM), AbbVie (ABBV), Conoco (NYSE:COP), Wal-Mart (NYSE:WMT), Eli Lilly (NYSE:LLY), Celgene (NASDAQ:CELG), Schlumberger (NYSE:SLB), AutoZone (NYSE:AZO), Wells Fargo (NYSE:WFC), Emerson (NYSE:EMR), McDonald's (MCD), Reynolds (NYSE:RAI), Target (NYSE:TGT), Accenture (NYSE:ACN), Coca-Cola (NYSE:KO).
    | Thu, May 21, 9:30 AM | 76 Comments
  • Fri, May 8, 4:35 PM
    • Tangoe (NASDAQ:TNGO) sold off today after slightly missing Q1 revenue estimates (while posting in-line EPS) and offering mixed guidance.
    • The company has also announced it's buying IBM's Emptoris Rivermine telecom expense management (TEM) software business for an undisclosed sum. Tangoe declares Emptoris has a "global blue chip customer base," and complements its Matrix suite of cloud telecom asset/expense management apps. The deal is expected to close at month's end.
    • Q2 guidance is for revenue of $56.5M-$57.5M and EPS of $0.18-$0.19 vs. a consensus of $58.4M and $0.19. Full-year guidance is for revenue of $245M-$250M and EPS of $0.73-$0.78 vs. a consensus of $239.7M and $0.79. Emptoris (naturally isn't factored into estimates) is expected to boost Q2 and full-year revenue by $1M and $10M, and hurt EPS by $0.01 and $0.04.
    • Tangoe blames the Q1 sales miss on "quarter-to-quarter variability of non-recurring revenue," while insisting it's "the less strategic component of our business."
    • Q1 results, PR
    | Fri, May 8, 4:35 PM | Comment!
  • Wed, May 6, 12:34 PM
    • Less than 2 months after launching cloud-based analytics services for mining Twitter data, IBM (IBM -1.9%) is partnering with Facebook (FB +1.1%) to deliver improved marketing/targeting tools for Facebook ad clients.
    • IBM, which has made several marketing software acquisitions over the last few years, will provide analytics and cloud-based marketing apps that give clients deeper insights into users being shown ads via Facebook targeting tools such as Custom Audiences (enables targeting based on both Facebook and non-Facebook activity), and help them design and run personalized ad campaigns covering Facebook and other channels.
    • IBM: "[A] retailer launching a new line of running gear can use Facebook's Custom Audiences and targeting solutions to segment its customer groups that are interested in long-distance running. The retailer can then glean aggregated insights into the audience's preferences in running gear and, based on location, offer deals on apparel that fit the appropriate training climate."
    • Separately, Oculus has announced a commercial version of the Oculus Rift VR headset will launch in Q1 2016, with pre-orders starting later in 2015. The Facebook unit states the commercial model will improve upon Oculus' 2014 Crescent Bay prototype through "an improved tracking system that supports both seated and standing experiences, as well as a highly refined industrial design, and updated ergonomics for a more natural fit."
    • Details about hardware, software, input, and game support will be given shortly. Samsung plans to launch a consumer-focused version of its Oculus-based Gear VR headset (relies on a phone's display and camera, currently aimed at developers and early adopters) by year's end. Oculus is widely seen as having an early tech lead over VR rivals such as Sony and HTC.
    | Wed, May 6, 12:34 PM | 3 Comments
IBM vs. ETF Alternatives
Company Description
International Business Machines Corp is an Information Technology (IT) company. It creates business value for clients and solves business problems through integrated solutions that leverage information technology & knowledge of business processes.