International Business Machines Corp. (IBM) Earnings Miss, Stock Craters


International Business Machines Corp. (NYSE:IBM) released its quarterly earnings results this morning. The stock plummeted by close to 11 percent on the back of high volumes as the company wasn’t able to meet street expectations. The company reported a earnings per share of $3.68 on revenues of $22.4 billion as against the street expectations of an earnings per share of $4.32 on revenues of $23.37 billion. Thus, the company disappointed on both the top line and bottom line expectations.stock-down-arrow1

International Business Machines Corp. (NYSE:IBM) reported a loss of revenues in both its US and European markets in the range of 2% each which is a huge negative. The company also reported a loss in revenue of up to 7% in emerging markets like Brazil, India and China on the back of slow growth pick up in these economies.

The company also experienced a fall in all its major segments which was seen as a huge surprise, as analysts had expected at least the cloud computing and consulting businesses to drive revenues this quarter. International Business Machines Corp. (NYSE:IBM) also reported that Global Foundries would be acquiring its Microelectronics semiconductor manufacturing business, a deal which the company expects to close by the end of the year.

Many analysts on the street believe that International Business Machines Corp. (NYSE:IBM) has been focusing on slow growth oriented businesses and is divided between the old businesses and new. The cloud computing business which the company believes would be the mainstay of the business going forward has not been able to offset the losses from its hardware and consulting division which is raising questions about whether the company is on the right track or not. The management believes that the company is focusing solely on fast growing business areas, but investors are currently not buying any of it and seen selling the stock.

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