IBM stocks were down at the close of the market on Tuesday as other tech stocks witnessed gains. The disappointing results which saw stock prices fall by 3 percent came after the company posted lower than expected Q3 earnings.
Analysts had expected IBM to post earnings between $12 billion to $13 billion while the company posted $12.3 billion. The company’s overall revenue increased by 8 percent to $26.2 billion, just shy of analysts expectations at $26.26 billion.
Keith Wirtz, chief investment officer for Fifth Third Asset Management told The Star:
“We’re in the early stages of third-quarter earnings season and everyone’s looking at top-line numbers to see any evidence of the economic slowdown working its way into financial results.”
“All the news on macro has been negative. At what point does it creep into the company numbers? We’re still seeing above-average results.”
While the company took a hit on Tuesday its steady stream of revenue has allowed IBM to increase their share prices by 28 percent this year when compared to the Standard & Poor 500 index’s 4 percent slip.
For investors IBM with their emphasis on both hardware and software has remained a good bet as their data centers and internet technologies continue to witness a growing market with higher demands for their products. In comparison to the full-year 2010 IBM said their revenue from cloud company had doubled in the first nine months of 2011.
It should be noted that IBM has been consistently beating market expectations and in Q2 2011 they surged by 16 percent.
For the full-year diluted earnings forecast IBM on Monday raised their per share expectations to $13.35, up from a prior call at $13.25.
Do you think IBM’s tech stock is a sound bet in a struggling economy?