Wednesday, January 21, 2009
IBM 87.68, +5.70, +7.0%) said it expects to earn at least $9.20 a share in 2009, while analysts had previously forecast the company to earn $8.75 a share for the year.
Chief Executive Samuel Palmisano also said the company was on track with its long-term goal for earnings of $10 to $11 a share.
"Here, we think investors had feared the worst," wrote analysts at J.P. Morgan in a note Wednesday morning. "Outside of EPS, we think that it is reasonable to assume IBM's general commentary implies a significant revenue drop in 2009 due to currency and macro distress, but there are offsets with margin improvements, a lower tax rate of 26.5%, and share buyback."
J.P. Morgan maintained its overweight rating on IBM.
For the fourth quarter, IBM said it earned $4.4 billion, or $3.28 a share, on revenue of $27 billion. During the same period a year ago, IBM earned $2.80 billion, or $2.80 a share, on $28.9 billion in sales. The company said its sales were down due to the impact of rising strength in the U.S. dollar.
The results exceeded the estimates of analysts surveyed by FactSet Research, who had forecast IBM to earn $3.03 a share on revenue of $27.9 billion for the quarter ended in December. Results got a boost from strong software sales and signings of new services contracts.
"Overall, given the quite challenging global economic environment, we believe these were good results," said Andy Miedler, a senior technology analyst with Edward Jones. "Given IBM's broad geographic and product diversification, and with around 50% recurring revenue, we believe IBM is one of the more defensive tech companies."
Miedler maintained his buy rating on IBM's stock.
In a statement, Palmisano said IBM had come through with a "strong fourth quarter" even though the company faced difficulties in the economy.
Shares of IBM closed Tuesday at $81.98.
By: DocMemory
Copyright © 2023 CST, Inc. All Rights Reserved
|
