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Why IBM Is Tumbling: BRIC Sales Plunge, Total Revenue Lowest Since 2009

Tyler Durden's picture


Curious why after nearly touching $200 in early trading IBM is down 4% in after hours trading?

Perhaps this has something to do with it: as the chart below shows, in Q1 IBM reported only $22.5 billion in sales, well below the $22.9 billion expected by the street, and down 3.9% from a year ago. In fact, this quarter's revenue was the lowest for IBM since the first quarter of... 2009. Net Income (non-GAAP of course), which was $2.6 billion and which met reduced estimates, was down a whopping 22% from a year ago.

But the punchline, one which Cisco is very familiar with, was this:

Revenues from the company’s growth markets decreased 11 percent (down 5 percent, adjusting for currency).


Revenues in the BRIC countries — Brazil, Russia, India and China — decreased 11 percent (down 6 percent, adjusting for currency).

And so the Snowden curse strikes again, as countries which don't enjoy being constantly spied upon opt to not to business with the companies they believe are most instrumental in allowing the NSA into their midst.


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Wed, 04/16/2014 - 16:45 | 4666712 TideFighter
TideFighter's picture

GOOG feeling ickly too.

Wed, 04/16/2014 - 16:50 | 4666728 Supernova Born
Supernova Born's picture

NSA inside

Wed, 04/16/2014 - 17:04 | 4666783 Buckaroo Banzai
Buckaroo Banzai's picture

I've been waiting eagerly for this filthy pig to take the beating it so richly deserves.

Anybody who drinks the IBM haterade should check out Cringely's extensive work deconstructing this bloated airbag of a stock. You will love it.

Wed, 04/16/2014 - 17:23 | 4666791 TruthInSunshine
TruthInSunshine's picture

...aaaaaand Google misses all around with AH tumble...

p.s. - aaaand Nestle misses big...not just tech...Nestle coming out with "Essence of Chocolate" bars soon, though, so there's that...

Wed, 04/16/2014 - 17:29 | 4666869 fonzannoon
fonzannoon's picture

wow the market already dismissed google from detention.

Wed, 04/16/2014 - 18:01 | 4666967 AlaricBalth
AlaricBalth's picture

The NSA's Trusted Access Program Office (TAPO) relies on IBM products. And so should you.


"Through industry partnership at IBM, TAPO offers:
Foundry Services including Multi Project Wafer runs, dedicated prototypes, and production in both high- and low-volume models.
Intellectual Property (IP) development, including standard prepurchased IP.
Packaging and test services.
Custom Logic Service: Cu-08, Cu-65HP, Cu-45HP, and Cu-32."

Wed, 04/16/2014 - 18:29 | 4667121 Say What Again
Say What Again's picture

What makes you so sure that the revenue short fall is tied to an association with the government and not a result of poor products, services, and sales strategies, coupled with the lack of capital for companies in the EM?

Wed, 04/16/2014 - 17:36 | 4666902 Squid Viscous
Squid Viscous's picture

and my magic OJ 8ball says we open ...Green!

Wed, 04/16/2014 - 18:13 | 4667046 John Law Lives
John Law Lives's picture

"Nestle coming out with "Essence of Chocolate" bars soon, though, so there's that..."


Nice one!

Wed, 04/16/2014 - 18:16 | 4667061 valley chick
valley chick's picture

Made my day End The Fed!  Tried to buy in bulk from Nestle and was denied.  Told them I can take my money elsewhere. They treat the consumer like shit.

Wed, 04/16/2014 - 19:04 | 4667239 Supernova Born
Supernova Born's picture

General Jack D. Ripper: Luckily I... I was able to interpret these feelings correctly. Loss of essence.
Group Capt. Lionel Mandrake: Hmm.
General Jack D. Ripper: I can assure you it has not recurred, Mandrake. Women uh... women sense my power and they seek the life essence. I, uh... I do not avoid women, Mandrake.
Group Capt. Lionel Mandrake: No.
General Jack D. Ripper: But I... I do deny them my essence.

Wed, 04/16/2014 - 17:04 | 4666785 NotApplicable
NotApplicable's picture

So... the sanctions are working?

Wed, 04/16/2014 - 17:18 | 4666827 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

IBM is a dionosaur being run by morons. If you invest in the cheapest overseas labor possible, the product will be low quality. This is the final result. No surprise here.

Wed, 04/16/2014 - 16:53 | 4666735 Squid Viscous
Squid Viscous's picture

it's GOOGL now they figured out a better way to swindle the common holders out of any voting rights, complicated as it was, but they had good jew lawyers no doubt

Wed, 04/16/2014 - 16:55 | 4666751 headhunt
headhunt's picture

The liberals never want an ordinary citizen to be able to vote - for anything.

You cannot go further left than the g00gle boys.


Wed, 04/16/2014 - 17:15 | 4666809 TruthInSunshine
TruthInSunshine's picture

As long as tech stock P/E ratios stay below an average of 9,000 I see
good things.

I'm sticking with highly negative P/E & P/S ratio companies, though, because that's where the value is, IMO.

Wed, 04/16/2014 - 16:55 | 4666753 Freddie
Freddie's picture

IBM is another shit spy company and always has been. They have been working for the elites NWO nazi & zio families since before WW2. Just like AT&T back in the old days and today.

Why would any european, asian or other company want to use NSA spy shit El See Eye Ahaa Duh Obamo hardware or spyware?

F em!

Wed, 04/16/2014 - 17:35 | 4666897 Jumbotron
Jumbotron's picture

Open source, Linux and in-house development by the big boys....Twitter, Facebook, Google, Amazon, Netflix.....etc.

Bitchez !

Wed, 04/16/2014 - 16:45 | 4666714 fonzannoon
fonzannoon's picture

If these numbers are as bad as CAT and MCD this is incredibly bullish.

Wed, 04/16/2014 - 21:13 | 4666765 Freddie
Freddie's picture

Well MCD makes shit GMO Monsanto fake Soylent Green "food." So who wants their shit? If donkey boys in Asia do not want their shit. CAT? Well their stuff is not loaded with spyware but how many more ghost cities can China build. "We no like spyware Uncle Sam Obama shit SkyNet spyware shit Yankee dogs!"

Wed, 04/16/2014 - 17:50 | 4666934 LooseLee
LooseLee's picture

...according to MORONS and IDIOTS et. al ONLY...

Wed, 04/16/2014 - 16:48 | 4666721 Squid Viscous
Squid Viscous's picture

let me have the temerity to say... bullish?

Wed, 04/16/2014 - 16:49 | 4666723 Tsar Pointless
Tsar Pointless's picture

Indeed, Squid. Quite bullish.

S&P should ramp another 40 points and the DJIA another 350 alone on this news.

Wed, 04/16/2014 - 17:16 | 4666810 Squid Viscous
Squid Viscous's picture

I will be disappointed if we open lower than 187.0 spx, we can shrug off 500 billion of "tech giants" down 3-4%, no Russian tanks in Kiev... strong BUY

Wed, 04/16/2014 - 16:49 | 4666727 seek
seek's picture

The NSA effect strikes again! (Hence they dumped the server biz on Lenovo so their biggest emerging market will keep buying hardware made by their biggest emerging market, and kept the service revenues coming.)

That, plus the markets are down in general. Intel reported their server business was down 7% Q/Q on units.

Tech is tanking, and I think it's a leading indicator of what's about to come.

Wed, 04/16/2014 - 16:51 | 4666736 fonzannoon
fonzannoon's picture

Seek, the question I am posing is, if mega cap crap was the safe haven of last resort, and now we are going to chuck that out the window...where do we go next? My answer is 2.4% on the 10yr and lower in stawks. How about you?

Wed, 04/16/2014 - 17:38 | 4666837 seek
seek's picture

The vibe I get (and we've seen it over and over on these pages the past couple months) is that economy is fucked and stocks are too.

Mega caps aren't the safe haven of last report. Cash is the safe haven of last resort (for those uninitiated in the ways of PMs, that is.) Between all this and Russia, I'm imagine we see a flight to cash and cash equivalents (10yr) soon. I wouldn't be surprised if the 10 year goes even lower than 2.4%. And the fuckers that issue them get a free ride and win once again. Ugh.

Wed, 04/16/2014 - 17:44 | 4666920 fonzannoon
fonzannoon's picture

I think Doc makes a good point below. Everyone is still too happy to play make pretend and completely ignore that these companies are starting to feel the effects of joe six pack dropping dead. But I do wonder if we are on borrowed time now. Like really really borrowed time. Not just really borrowed time like it was from 2012 till now, or borrowed time like it was from 2009 to 2012.

Wed, 04/16/2014 - 18:52 | 4667192 seek
seek's picture

We're definitely on borrowed time. If you look into the details -- end market details, not financials -- they're up from the early '09 crash numbers, but still down from the '07-'08 figures. That was six freaking years ago now. We've gone an entire five-year business cycle with zero improvement, meanwhile EBT has boomed and the actual employment has been flatlined since the crash, yet everything stumbles along (or grows.)

It's unsustainable and a lot of the larger corps know it. There's a reason they're not making capital investments, because they know it's pointless to do so.

As far as when this all comes home to roost -- I'm sure we'll see some correction soon. But the real correction is the collapse, and I'm still convinced it's a 2016-2018 kind of thing. Not that it won't get worse before then, of course.


Wed, 04/16/2014 - 19:23 | 4667294 Omen IV
Omen IV's picture

and that is without the anticipated effect from a competing intl. currency from Russia / China et al  kicks in 2015 - that takes say 25% of intl transactions  - the inflation from currency adjustment in USA will be incredible plus cloud / hardware services from say Swiss company dedicated to data integrity, german co for social media and email etc etc - replaces US sourcing

they will eventually call it the Long Term Obama  Effect in 2025  - destroyed the reserve currency with idiotic sanctions - warning anyone with cash to go away and his NSA destroyed US tech cos. intl sales.

he is truly incredible!

Wed, 04/16/2014 - 18:01 | 4666994 I Write Code
I Write Code's picture

PMs maybe, but cash is definitely NOT safe from a spike in inflation.

Wed, 04/16/2014 - 17:19 | 4666832 TheRideNeverEnds
TheRideNeverEnds's picture


Wed, 04/16/2014 - 19:30 | 4667032 813kml
813kml's picture

As someone who just had an international IT contract delayed (more likely cancelled) yesterday because of 'security concerns', I can verify that the world is not happy about the NSA.  

The BRICS are building their own internet for a reason and the US is not invited.  The US is the new AOL, and is also SOL.

Wed, 04/16/2014 - 16:50 | 4666733 MFL8240
MFL8240's picture

Doesnt matter the stock will go up regardless!

Wed, 04/16/2014 - 16:52 | 4666739 HaroldWang
HaroldWang's picture

Give it a day or two and endless soundbites from Yellen with Liesman telling everyone the economy is strong and new highs for IBM lie straight ahead.

Wed, 04/16/2014 - 17:07 | 4666793 Squid Viscous
Squid Viscous's picture

IBM is old economy, time to move ahead

Wed, 04/16/2014 - 16:53 | 4666746 Dr. Engali
Dr. Engali's picture

They don't care about the performance. The insiders will be protected and rewarded as long as they remain silent and do what the NSA tells them to do.

Wed, 04/16/2014 - 16:55 | 4666756 Shizzmoney
Shizzmoney's picture


I mean, IBM has been on steep decline since the late 90s for Christ's sake.  How do folks think they've kept afloat?  Sales? LOL

Don't worry, they'll get the first crack at the govt contract when the riots start happening and they RFID all of the protestors.

Wed, 04/16/2014 - 17:10 | 4666803 NotApplicable
NotApplicable's picture

They're pretty good at extorting cash from governments in exchage for building service centers there. Then they work the fools who think "Wow, I got hired by IBM! Awesome!" like an indentured servant until they finally wise up and leave, then they get the next fool in line to pick up the slack.

All in all, not a bad business model, as it beats working for a living.

Wed, 04/16/2014 - 17:33 | 4666889 TruthInSunshine
TruthInSunshine's picture

Once IBM figures out how to monetize Watson (from Jeopardy fame) the sky is the limit.

Wed, 04/16/2014 - 16:54 | 4666749 Cursive
Cursive's picture

I thought the answer was going to be that Big Blue accountant's ran out of phatom revenue to book.

Wed, 04/16/2014 - 17:00 | 4666774 Oldwood
Oldwood's picture

So the big question is...where is all of the money coming out of IBM stocks going? This is like playing wack-a-mole!

They are obviously not putting it in the bank to draw .5% so I assume they are pushing it elsewhere and that will be the next golden opportunity, right? It sure seems like a good time for a new ponzi scheme. With all this cash setting in piles of shit, people have to be looking for the buying opportunity. Maybe set up some new solar power grid system in the middle of Africa, or better yet, on Mars! Optimism is much easier to sustain when the object of your greed is far enough removed to avoid a reality check. I vote for a Hopium mine on Mars!

Wed, 04/16/2014 - 17:04 | 4666782 NOTaREALmerican
NOTaREALmerican's picture

It just adds to the pool of money "sitting on the sidelines" waiting for that next "buying opportunity". 

Wed, 04/16/2014 - 17:08 | 4666796 Unknown Poster
Unknown Poster's picture

I wonder how much is bought on margin, and do the loans just get paid off? The big money mutual funds that are constained in what they can invest in are probably hating their choices about now.

Wed, 04/16/2014 - 19:24 | 4667292 Cthonic
Cthonic's picture

what money?  oh i see, you thought there was some Volume associated with the price move...

Thu, 04/17/2014 - 00:03 | 4668238 Hal n back
Hal n back's picture

kind of zero sum huh? If you sell to me net cash sitting on sidelines is the same.


But our problem is we are not banks using OPM without recourse.




Wed, 04/16/2014 - 17:01 | 4666775 Son of Captain Nemo
Son of Captain Nemo's picture

Look at the bright side.  SSL will finally get fixed and no more "heart burn" for the BRICS?

Hope IBM, HP, Cisco, Juniper get taken to the cleaners!

They had many opportunities to fix it and took the money and walked away!

Wed, 04/16/2014 - 17:02 | 4666779 NOTaREALmerican
NOTaREALmerican's picture

Gotta wonder tho,  is this a result of Snowdon and the NSA or just a general economic slowdown in those countries.

In reality, if you want a computer not invested with NSA spyware there's not allot of places to go yet. 

Wed, 04/16/2014 - 17:20 | 4666833 Son of Captain Nemo
Son of Captain Nemo's picture

True.  And having just said that...

What an opportunity for countries like Germany to fill the void of American paranoia and controlled stupidity?

At this point the German people need to throw the Merkel government out on it's ass and start over.  With the way the U.S. is handling Eastern Europe and the rest of the World for that matter there is no future with the U.S. as a business partner!

Wed, 04/16/2014 - 19:30 | 4667318 Omen IV
Omen IV's picture

Intel Inside sticker on the laptop will revert to No NSA Inside - origin Switzerland  - with money back guarantee and insurance policy - same with cloud services

Wed, 04/16/2014 - 17:02 | 4666781 ebworthen
ebworthen's picture

Google missed too.

N.S.A. raping the 4th Amendment, but apparently hurting their corporate partners too.

Wed, 04/16/2014 - 18:06 | 4667008 Ariadne
Ariadne's picture

In the past 100 years America has gone from the innovator becoming CEO, to the production manager, to the sales manager, to the accounting managers, and now that all the corporations are in bed with der fuhrer, the security managers are guiding the companies.



Wed, 04/16/2014 - 17:12 | 4666811 Bunga Bunga
Bunga Bunga's picture

Thank you NSA. But don't worry, those customers will come back some day, maybe in 100 years.

Wed, 04/16/2014 - 17:21 | 4666835 pragmatic hobo
pragmatic hobo's picture

is this their 4th straight miss?

Wed, 04/16/2014 - 21:16 | 4667717 Emergency Ward
Emergency Ward's picture

Those stupid non-recurring items keep recurring.

Wed, 04/16/2014 - 17:21 | 4666839 Fuh Querada
Fuh Querada's picture

I thought the accountants can generate any numbers they want.

Thu, 04/17/2014 - 08:47 | 4668985 Pee Wee
Pee Wee's picture

FASB 157 - mark to fuckall

Wed, 04/16/2014 - 17:23 | 4666848 double 007
double 007's picture

so fucking what dow up 162

Wed, 04/16/2014 - 17:32 | 4666868 Squid Viscous
Squid Viscous's picture

very good! my pet monkey just said the same thing, more or less - it's amazing how you can train them! but he doesn't have ZH account yet...

Wed, 04/16/2014 - 17:32 | 4666885 Fuh Querada
Fuh Querada's picture

best spank him then

Wed, 04/16/2014 - 17:34 | 4666891 bdub2
bdub2's picture

Happy 25th CNBC!

Wed, 04/16/2014 - 22:01 | 4667890 Rising Sun
Rising Sun's picture

fuck you CNBC for existing and pumping out that lousy shit for the last 25

Wed, 04/16/2014 - 17:57 | 4666968 RSDallas
RSDallas's picture

It was strange that in the last couple of weeks, when the dow got slammed, IBM was up while everything else was down. IBM has a big impact on the DOW. HMMMMM.

Wed, 04/16/2014 - 18:05 | 4667007 q99x2
q99x2's picture

The Globalists have taken over Washington D.C. The money changers have taken over the printing press. The NSA has taken over US Tech industry. The committee of 300 are preparing to have Russia and China nuke the United States of America and Obama is going to read "my Pet Goat." or I mean he's going golfing.

Whatever Fuck the Globalists wherever and whenver possible.

Buy Bitcoin. and Maxcoin too.

And don't forget to duck and cover if you see any missing 777s headed toward you.

Wed, 04/16/2014 - 18:05 | 4667012 I Write Code
I Write Code's picture

IBM is a wasting (wasted) asset, and it's a mystery how it's still in business at all, outsourcing all engineering out of the US five years ago.

I've long suspected the company's stock is used as a front for fed manipulation far beyond most others.  This may make it a super-special investment opportunity, if you can read the tea leaves.

Wed, 04/16/2014 - 18:15 | 4667055 Tegrat
Tegrat's picture

IBM has been in a wonderfull trading range between 172 and 200 for a while. Learn to make dollars off volatility. Funny everyone says it keeps going up and down - i cant make any money.  Predicted a bounce off 172 a while back on a popular trading site a while back and it happened. Now time to short/buy puts and ride it to at least 190 which is now support.

Wed, 04/16/2014 - 18:36 | 4667132 Squid Viscous
Squid Viscous's picture

wow you're a fucking genius -"channeling stocks dot com" guy!

Wed, 04/16/2014 - 18:22 | 4667090 NickVegas
NickVegas's picture

My thesis is the destruction of American tech by the NSA is centrally planned. Yup, all part of the big plan.

Wed, 04/16/2014 - 18:53 | 4667197 icanhasbailout
icanhasbailout's picture

What foreign company in their right mind would do business with a US tech company?

Wed, 04/16/2014 - 19:30 | 4667317 Karaio
Karaio's picture

Working in IT in Brazil, here nobody cares IBM. They lack humility when talking with us. Consider themselves superior. 

Fuck, you shove your finger in the hole and run away. 


Wed, 04/16/2014 - 22:00 | 4667877 Rising Sun
Rising Sun's picture

I B M = I Buy Macs

Wed, 04/16/2014 - 22:16 | 4667954 nathan1234
nathan1234's picture

Boeing is next on the list.

Now the whole world or at the very least airline owners know that Boeing has systems installed to take over and run by remote control.

Your aircraft in essence is not yours.



Thu, 04/17/2014 - 03:11 | 4668508 pitz
pitz's picture

Too many incompetent H-1B's stinking up the company. 

Thu, 04/17/2014 - 07:36 | 4668748 vyeung
vyeung's picture

if they continue this, any offering from other countries that have the same capaibilitie, people will switch in a heartbeat.

We don't want to be monitored. We are not RATS / SHEEP /  and do not need domestication.

Thu, 04/17/2014 - 08:44 | 4668965 Pee Wee
Pee Wee's picture

Maybe IBM should just change their initials to NSA - all they sell is a police state in a chassis and the entire world knows it.

Buh-bye IBM, have fun being liquidated by the Chinese.

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