This page has been archived and commenting is disabled.
IBM Craters To 2 Year Low On Massive Revenue Miss, Asia-Pac, BRIC Sales Both Plunge 15%
Judging by the plunge in IBM stock after hours (accounting for a major portion of the Dow Jones Non-industrial Average Index), the CFO can't pay shareholders with hopium and rumors. The reason: while IBM beat EPS modestly with a very adjusted bottom line of $3.99, beating estimates of $3.96, driven mostly by this: "IBM’s tax rate was 16.0 percent, down 8.6 points year over year" (assuming a flat tax rate Y/Y, GAAP EPS would plunge from $3.68 to $3.30), it was revenues - that ongoing 2013 horror story for the "stawk" and economic "recovery" - that was the problem, because instead of printing at $24.74 billion where it was expected, sales missed by a whopping $1 billion, or $23.72 billion. Of note: while America revenues of $10.3 billion dropped just 1%, and Europe was actually up 1%, it was the all important China and Japan, i.e. Asia-Pacific, where revenues cratered by an unprecedented 15%! So much for both Abenomics and the Chinese "recovery." And what's worse, the Emerging Market callamity of Q3 finally took a big bite: "Revenues in the BRIC countries — Brazil, Russia, India and China — were down 15 percent." Time to push the global recovery myth to the 4th half of 2013 (the third half is where the government shutdown will be squeezed).
Some more disappointments:
- Non-GAAP gross profit margin of 49.1% missed expectations of 49.4%
- Services revenue down 3%
- Systems and Technology revenue down 17%
The good news: the company keeps its guidance...
The company expects full-year 2013 GAAP diluted earnings per share of at least $15.01. Operating (non-GAAP) diluted earnings per share expectations remain at least $16.25; and at least $16.90, excluding the second-quarter workforce rebalancing charge of $1.0 billion. Operating (non-GAAP) diluted earnings expectations exclude $1.24 per share of charges for amortization of purchased intangible assets, other acquisition-related charges, and retirement-related charges.
... For now.
And so on. At least the company did not blame this latest Q3 earnings fiasco on the Q4 government shutdown or partly-sunny, sometimes overcast weather.
End result: stock plunging after hours to fresh 2 year lows. Maybe Buffett should stick to banks and other crony capitalist government-bailout specials in the future.
- 15790 reads
- Printer-friendly version
- Send to friend
- advertisements -



Hard to hide those revs
I bet that IBM retraces 60-100% of those losses back before the weekend. As long as the Fed keeps printing, multiples will keep expanding:
http://dareconomics.wordpress.com/2013/10/16/around-the-globe-10-16-2013/
@Dareconomics
Look at BAC today. Up +2% after abysmal earnings. SCSS will probably be at all times highs in another months after missing EPS by 7 pennies....
Exactly. The only thing that matters is the printing press, which is still working just fine;
http://www.newyorkfed.org/markets/tot_operation_schedule.html
But Cramer said China was fine;)
Hard data, bitchez!
I kinda like not having government numbers distracting everyone lately. Puts a little more focus on the individual company numbers. (I would almost say "fundamentals" but that would get me banned from ZH) And those numbers, as it turns out, aren't so good. And they haven't been for quite a while.
We've entered recession, in my opinion. Just won't have realized it for a while. Too many distractions, but I think it is happening.
Remember:
2% "real" growth - 2% understated inflation = flat.
1% "real" growth - 2% understated inflation = recession
The Fed has failed. This pretty much makes it official.
Cringely has been all over IBM for years, as the company has been gutted and replaced with $10/hr help from India and Eastern Europe. It's a fucking house of cards and somebody accidentally left the window open.
Latest in a long series: http://www.cringely.com/2013/08/07/fulfilling-customer-requirements-is-a...
Oops....revs down....more layoffs of those expensive Americans coming....
Can't wait to see them f'ing implode....these assholes were one of the primary instigators of the whole offshore meme....Soon the cautionary American tale of what happens when you canabilize your entire skills base and fill it with low IQ 3rd worlders.....
what a bunch of nonsense. Working for a top-5 tech company and we have had open reqs for almost a year and no one to fill them. had to make a recruiting trip to eastern europe to hire candidates that are better than most candidates we get within the US. granted we are picking the top 1 percentile in easter europe but here we can pick only the top 5 percentile with our salary range.
Face it the only way we can attract better talent in tech is if we pay more than the investment banks where a lot of iq points go. At those price levels american IT cannot compete.
This whole idea of american exceptionalism is bullshit. there exists the same gaussian curve of IQ in all countries. Its just that american citizens are more entitled. ITs not because psychology pays more and costs less to go to school that there are 90K graduates in psychology every year and 90K graduates for ALL FIELDS OF ENGINEERING AND COMPUTER SCIENCE combined. Look up the statistics.
Ummm your reply is full of it. There are huge numbers of unemployed US tech graduates who apply to tech jobs not even to receive the basic courtesy of a response. The whole idea of the top students going into investment banks is a giant myth. A few do, but most, if they can't find a job, end up becoming drifters. The tech sector has not expanded its employment meaningfully for American talent in over a decade. There's basically a decades worth of CS,EE, physics grads unemployed because of this nonsense and that of H-1B abuse.
Sounds like the problem at your 'top-5' tech company is simply that of intransigent HR not hiring people. Tell them to start hiring some Americans. They're out there.
I am not saying there arent ANY unemployed amerixan tech workers....just not many that we think are good enough I should know I phone scren 2-3 canfidates a week.
Sounds like your thresholds are way too high then. Or you don't pay enough. I find that with phone screens, the tendency is for the screeners to be overly obsessed with their own work, rather than looking for a general body of knowledge. You can't expect someone who has a general education in a particular STEM field to have an in-depth knowledge of your specific domain problem.
Just like Lehman?
wouldn't you just love to slap that son-of-a-bitch?
Time to pay for being an NSA tool.
#41
Catch that falling knife,
er, maybe not.
Asia doesn't want to buy anything from IBM because they know it all has a backdoor to the Nsa
Digital assless chaps.
Had to say it.
But based on those smarmy "I'm an IBM'er" adds on TV, I thought IBM was doing great because they were building a smarter planet....
The ads are fairly misleading as it is fairly common knowledge in the industry that IBM has fired most of its American staff, and replaced them with Desis. Basic research has been cut to the bone.
im sure this dip will get the fuck bought out of it by tomorrow morning.
BTFOTFD -- Buy The Fuck Outta The Fucking Dip.
can't they just borrow money like al the other blue chips for pennies, buy back their stock and make the eps number explode higher. The wall street ANALysts can ignore the revenues...."it's a revenueless recovery"..BUY BUY BUY
Should be good enough to push SPX to new ATH
Another chink in the Armor. ..2 yr low...missed that one....no biggie BA disintegrating planes should hold up the Dow
Hey, you leave AnAnonymous out of this!
good for at least -1 point DOW tomorrow
This was weather related.
@fonz
Big Blue reaffirms guidance! BTFD!
"No matter what, we'll borrow enough money to buy back enough shares that we'll never miss EPS estimates."
- Overheard on IBM earnings call
NSA revelation related is more like it.
Expect similar from other US hardware/software co's.
It's only IBM.
It's not like it was Herbalife, or Priceline, Or Prepaid Legal.
dont worry ibm, ben will continue buying up all assets in the dow and s&p and will pump your stock up along with others no matter how poor fundementals are.
thank you for telling the truth though, but in this time period, earnings dont matter.
also, how can asia sales pluge 15 percent? all the smart people on bloomberg, cnbc, etc told me how well things are doing in asia, this cant be possible.
Maybe they finally got smart to NSAware?
See Larry ?? This is what happens when you let a woman run Big Blue . The Fed is next up for affirmative action implosion....thankfully.
And this after cutting employee and retiree benefits drastically...
This has to be one of the top 10 worst companies to work for in the world. I have never met anyone from IBM who had anything good to say about them. They do have some good shit happening (Watson replacing doctors) but I can't help but think a company like Amazon, Google and even MSFT taking some business away on the data center side of things and hardware sales is a whores business. There not going anywhere like broke but they ain't what they use to be.....
brutally competitive market space. insofar as "girls" go HP seems to be doing okay now. don't really know anything about the business other than "software as services." don't fit in well with the internet culture and "information liberation" nor are they big so as i can tell into the "raw horsepower" or mathematical side of the data driven world (Intel, Microsoft.) i don't think they're vulnerable to a take down but certainly a take out. this company ran most of the industry up this way out of business so it's not like they don't know the game they're in. they invented it actually. http://en.wikipedia.org/wiki/Thomas_J._Watson i thought he spent some time in jail but other than having an arrest warrant placed on him by President Taft that seems to be the only mention of any of his criminal activities. His son is considered one of the great CEO's of all time...and wrote a great biography which is a must read. It was his son who pushed the business into mainframes and out of punch cards...which wasn't easy and if it hadn't been done would have doomed the company over 60 years ago.
I work in corporate IT. Every tech/developer I've ever met spews never ending verbal abuse when you mention IBM and their software stacks. It's a nightmare to work with, but somehow the sales bitches always gets their way into the corporates...
BUY IT...Buy It All..Free money and risk off like a mofo...I am certain none of these companies considering this is an atrocious earnings season are laying off workers...I am sure they are hiring...Part time that is..The parasite is actually killing the host.
The printing press is officially the economy.
Don't worry about Ginni, she got plinni. http://www.bloomberg.com/news/2013-03-11/ibm-s-rometty-earns-16-2-millio...
And tomorrow IBM will be back to even.. GUARANTEED!
I don't understand. What does the performance of the company have to do with stock price again? I'm getting confused.
I suddenly "feel" less wealthy. lol.
I'm sure they will find some money to do a stock buyback. It's important for these companies to operate hand-in-hand with QEBen
Sales? revenues? products? What the fuck is this, fundmentals have not mattered for quite some time now.
Have a look at IBM's long-term chart. The Big Blue Bitch is rolling over.
http://finance.yahoo.com/echarts?s=ibm#symbol=ibm;range=5y;compare=;indi...
Too true, IBM, Catapillar, Boing... All are down YOY by double digits. They were down double digits last year also. If nothing of Value is being produced, what new metric shall they judge the economy by? I had to laugh yesterday, world was about to end according to MSM... and the index's were all in the green.
Someday, they'll be right about the World ending. I just hope we get to see some Anchor(ette)s handcuffed and frog-marched off the news set (Live and in Color!) before that happens.
This entire company, Indian Bowel Movement (IBM) should be deported. One of the biggest H-1B visa abusers in the country. Time to put their pack of Anil Dipshits back on the plane.
In la-la land, all is well.
http://www.huffingtonpost.com/huff-wires/20131016/us-earns-ibm/?utm_hp_r...
"IBM says its third-quarter net income rose 6 percent, as better profitability offset lower revenue."
IBM is a major dow component. It will be bought right back up to 200, hand over fist.
Dude. Its at a 2 yr low.....can you say canary. 90% owned by the 1% ers
It doesn't matter. They'll up dividends, perform stock buybacks, and reborrow at 3% interest to fund their current liabilities.
IBM may be a company issue rather than a world issue.
IBM has put all its eggs in the globalization of outsourcing bucket. It has had a few major clients who have publicly blamed them for their problems and asked them to leave.
IBM is just IBM (Indians Badly Managed)
I've got a tech friend who's worked there stateside for a couple of years now, and it sounds like they run off everyone as soon as they know how to do anything.
ibm has gone into india in a huge way and india is tanking. china technology is maturing. who needs ibm when all you need to do is change the name to ibn and steal all their work. japan is muddling. the usa is still treading water as is europe.
either ibm is a harbinger for the sector or this report is an exposure of the weakness of its business model. a short position on the bounce tomorrow will probably work for the next few weeks.
Strong buy
Who the fuck would buy anything from any American Tech company after what we've learn about spying etc. If I'm a soverign nation I'would be dumping U.S. tech as fast as I can replace it.
i get your sentiment...but honestly. replace it with what? its a big boat now, we sink together and I for one trust foreign tech who has been stealing ours for years less than our own
Meahwhile, Select Comfort down 25% on missed earnings, and other mattress makers down also.
Guess you don't need that new bed so bad if you've got cash and PM's stuffed under the current one.
i love zero hedge, but don't you guys/gals get it. ibm missing does not matter. nothing matters anymore. the patients have FIRM control of the asylum. you can hope and pray for justice in our political and financial institutions and write about everything under the sun revealing their criminal acts, but it will not change anything. as i see it, only a true black swan event, and it is going to have to be startling, or the hand of God moves to some sort of action, will the present malfeasance end.
Yeah, except mathematics is a stone, cold bitch and doesn't really give a shit what Obama, Bernanke, Yellen, et al want. What is going to happen will be one of those butterfly wing events where something seemingly minor will cause a loss of confidence and the attempted exit for the doors will snowball into one mother-fucker of an economic meltdown. Collapse of the current system is inevitable.
YES. And so sayeth Jamie Dimon too.
De cloud! De cloud!
If IBM were only APPLE, it would be down 25% now.... And I'm waiting for that day this quarter. ...
Bring this shit down already the hopium rallies made all my fcking puts go down the drain... I don't give a damn anymore. Exhausted killing my account that is almost negligible now....
Snowden plunge?
Asia Pac 15% down incl. 11% fx headwind. So asia wasnt that bad on underlying basis. BRIC is more concerning as fx adjusted sales were down 12%.
Time to drop IBM from the DOW 30 Industrials Index. HP, meet IBM. IBM, HP.
Call Barry. Get the fucking handouts ready. What's good for GM is good for IBM.
PRINT FASTER!!!!!
BTFD! Nooot!!
Good Lord we really are priced to perfection.(assuming price discovery is real, which i do not believe), but just look at the numbers. Regardless of what some analyst dork who has never made a dollar in his/her life was expecting....holy shit it looks like a solid company
... do you still cling to the idea that the stock price is somehow related to earnings?
is a drop of 5$ a share really that big a deal?
Since dollars are the new pennies, I would say that a 10 ~ 20 $ swing in any stock over 120$ is just noise.
Same with these 10~ 100$ price swings in gold, its just noise it doesn't mean anything....... for gods-sake you spend more on delivery for gold and spot premium than any swing in price the metal has seen in the past year.
Now if IBM went from 180 to say ..... 130.... that would maybe indicate something is going on...
Now if gold went from 1280 to 1100 then maybe it might be worth taking a look into whats going on... not really but it MIGHT peak interest.