Tom Reese/Paul Rubillo, Dividend.com
International Business Machines Corp. (IBM) delivered a mixed earnings report after the bell Monday, beating analyst EPS estimates, but booking lower-than-expected revenue.
The information technology giant reported fiscal first quarter profits of $2.3 billion, or $1.70 per share, compared to $2.32 billion, or $1.64 per share in the year-ago period. Revenue fell 11% to $21.71 billion from $24.50 billion in the same period.
On average, Wall Street analysts expected earnings of $1.67 per share on revenue of $22.5 billion.
Although IBM reaffirmed its 2009 full-year guidance of $9.20 per share, many of the company's core businesses showed signs of weakness.
IBM's Business Units - First Quarter Performance
• Services revenue down 10% to $13.2 billion
• Software sales down 6% to $4.5 billion
• Hardware sales down 24% to $3.2 billion
One bright spot in the report was that long-term services signings increased 14% to $7 billion in the quarter.
IBM shares initially fell $1, or -1% after hours Monday, but pared much of those losses by Tuesday morning.
The Bottom Line
We had recently added shares of IBM Corp to our “Recommended” list and the stock has been up nearly 8% in that short amount of time. The company has a dividend yield of 1.99%, based on last night's closing stock price of $100.43. We continue to like the shares here after this earnings announcement. That said, we will be watching the stock closely as we move forward.
International Business Machines Corp. (IBM) is a "recommended" dividend stock, holding a Dividend.com DARS™ Rating of 3.5 out of 5 stars.
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