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IBM Scores While Others Can’t (IBM)

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By Douglas A. McIntyre Updated Published
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Ibm_logo_2International Business Machines (NYSE: IBM) has posted some mixed earnings with earnings at $3.28 EPS and revenue at $27.01 billion.  Thomson Reuters (First Call) had estimates of $3.03 EPS and $28.05 billion in revenue. The guidance is much more important.

The company said that total Global Services revenue fell 4% (up 2%adjusting for currency) to $9.6 billion, while its revenue from itssoftware segment was up 3% (up 9% adjusting for currency) to $6.4billion.  Revenues from the Systems and Technology business was $5.4billion for the quarter.  While this S&T revenue is a drop of 20%,that decrease is far less than expected.  IBM’s total gross profitmargin was also 47.9% for Q4-2008, compared with 44.9% in the 2007 period.

The company put its currency-adjusted services backlog as of December 31, 2007 at approximately $117 billion.

What is most important is the $9.20 EPS target for 2009.  Thisrepresents a gain of about 3% for the year despite the woes seen in thebroader economy.  Consensus was only $8.75 EPS.

Solid guidance is key here.  Shares closed down almost 3.5% at $81.98in regular trading.  All those losses are being taken back as sharesare back up at $85.10 in active after-hours trading.

Jon C. Ogg
January 20, 2009

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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