IBM Corp. | $IBM Stock | Shares Sell Hard After Earnings Announcement


International Business Machines Corporation (NYSE: IBM)


IBM, the multinational $156 billion dollar market cap company, based in Armonk New York that manufactures and sells computer related electronics as well as a whole host of other products and services reported their fiscal quarterly earnings on January 18, 2018 after the market closed.

Immediately, the shares sold hard in the after-hours trading session. Shares which closed the regular session at $169.12 finished the aftermarket session at $163.30 which was down 3.44% or nearly $6. While short-term traders might be unhappy with the reaction to the earnings (they don’t usually own shares long enough to receive the dividends), longer-term investors might wind up snapping up shares on the weakness because of the Hefty dividend that IBM pays.

Before today’s after market sell-off the dividend yield was 3.55%. This will likely rise incrementally if shares stay down like they are because as the share price goes lower the dividend yield will rise per share.

The Numbers

While IBM slightly feet most Wall Street estimates for the quarter and actually showed some form of Revenue growth quarter-on-quarter the numbers were not good enough to keep the share price we’re it closed.

The company reported losing a little over $1 billion dollars which is $1.14 per share. Revenues came in at $22.5 billion dollars which compares with 21.7 billion dollars in the year-ago period.

The area that showed the greatest positive revenue results and which added to the bottom line for the quarter was in the area labeled Systems Revenue and that includes Hardware and Software operating systems related materials.

IBM Chart

As you can see in the 5-minute chart above, $IBM shares took a nose dive after their earnings release. While shares did sell off pretty hard as soon as the earnings were announced, she has found the bottom and rebound it about 50% from the lows and closed at $163.30.

Depending where prices open the day at, we should see $161, $160.92 and $160 act as support with $164.50 and $165 acting as resistance. With a big gap down like this it would surprise me to see a bounce at the open as shorts look to cover and speculative buyers look to take advantage of the dip.

Company Comments

Ginni Rometty, IBM chairman, president and chief executive officer had this to say to the media:

“Our strategic imperatives revenue again grew at a double-digit rate and now represents 46 percent of our total revenue, and we are pleased with our overall revenue growth in the quarter. During 2017, we strengthened our position as the leading enterprise cloud provider and established IBM as the blockchain leader for business. Looking ahead, we are uniquely positioned to help clients use data and AI to build smarter businesses.”

And James Kavanaugh, IBM senior vice president and chief financial officer added,

“Over the past several years we have invested aggressively in technology and our people to reposition IBM. 2018 will be all about reinforcing IBM’s leadership position in key high-value segments of the IT industry, including cloud, AI, security and blockchain.”

Company Profile

International Business Machines Corporation provides information technology (IT) products and services worldwide. Its Cognitive Solutions segment includes Watson, a cognitive computing platform that interacts in natural language, processes big data, and learns from interactions with people and computers.

The company’s Cognitive Solutions segment also offers data and analytics solutions, including analytics and data management platforms, cloud data services, enterprise social software, talent management solutions, and solutions tailored by industry; and transaction processing software that runs mission-critical systems in banking, airlines, and retail industries.

The company’s Global Business Services segment offers business consulting services; delivers system integration, application management, maintenance, and support services for packaged software applications; and business process outsourcing services. Its Technology Services & Cloud Platforms segment provides cloud, project-based, outsourcing, and other managed services for enterprise IT infrastructure environments.

This segment also offers technical support, and software and solution support; and integration software solutions. The company’s Systems segment offers servers for businesses, cloud service providers, and scientific computing organizations; data storage products and solutions; and z/OS, an enterprise operating system for z systems.

Its Global Financing segment provides lease, installment payment plans, and loan financing services; short-term inventory and accounts receivable financing to suppliers, distributors, and remarketers; and remanufacturing and remarketing services. It has a strategic collaboration with ABB Ltd to develop industrial artificial intelligence solutions.

The company was formerly known as Computing-Tabulating-Recording Co. and changed its name to International Business Machines Corporation in 1924. The company was founded in 1911 and is headquartered in Armonk, New York.-YahooFinance