{"id":13198,"date":"2015-04-21T18:28:56","date_gmt":"2015-04-21T23:28:56","guid":{"rendered":"http:\/\/news.medill.northwestern.edu\/chicago\/?p=13198"},"modified":"2015-04-22T11:34:25","modified_gmt":"2015-04-22T16:34:25","slug":"ibm-earnings-down-stock-pops-then-falls","status":"publish","type":"post","link":"https:\/\/news.medill.northwestern.edu\/chicago\/ibm-earnings-down-stock-pops-then-falls\/","title":{"rendered":"IBM earnings down, stock pops then falls"},"content":{"rendered":"

By Brian MacIver<\/p>\n

Despite declining net income and revenue, tech giant IBM Corp. reported<\/a> late Monday a better-than-expected increase in adjusted earnings, causing its stock to jump more than 3 percent in after-hours trading before declining on Tuesday.<\/p>\n

<\/p>\n

Net income decreased to $2.33 billion, down from $2.38 billion a year earlier.<\/p>\n

Diluted earnings per share for the first quarter ended March 31 were $2.35, compared with $2.29 a year ago, and short of analysts\u2019 expectation of $2.55. Adjusted earnings per share were $2.91, up from 2014\u2019s first quarter $2.54 and above analysts\u2019 estimate of $2.81.<\/p>\n

The company bought back $1.17 billion of shares, down from a year ago.<\/p>\n

IBM\u2019s revenues were negatively impacted by a continued selloff of divisions, a struggling hardware division, and the strength of the American currency.<\/p>\n

IBM has been liquidating several of its divisions in order to restructure and refocus the company\u2019s mission. Discontinued operations represented a loss of 9 cents in earnings per share.<\/p>\n

Systems hardware showed a decrease in revenue to $1.66 billion from $2.14 billion at the same time last year. However, the gross profit margin was up by 10.5 percentage points, indicating the company is cutting into expenses as well as into revenues.<\/p>\n

Chief Financial Officer Martin Schroeter said in the conference call that \u201ccurrency had an eight point effect on revenue.\u201d This indicates a decrease of $1.78 billion in the company\u2019s revenue.<\/p>\n

Analysts were wary of the company\u2019s decrease in revenue from its services department. Tien-Tsin Huang, an analyst at JP Morgan in New York, noted a \u201cdeceleration in GTS,\u201d or Global Tech Services. IBM reported a decrease in the department\u2019s gross profit margin of 1.4 percentage points.<\/p>\n

Despite the slow start, the company is projecting net earnings per share between $14.17 and $14.92 for 2015. At best, this indicates a drop of 4.3 percent from last year, but is within the range of analysts\u2019 estimates.<\/p>\n

The stock closed at $164.26 on Tuesday, down $2.88 from Monday\u2019s close of $167.14.<\/p>\n

Photo at top: IBM’s quarterly earning dropped in part due to the strong American dollar (Alfred Lui<\/a>\/Creative Commons<\/a>)<\/div>\n","protected":false},"excerpt":{"rendered":"

By Brian MacIver Despite declining net income and revenue, tech giant IBM Corp. reported late Monday a better-than-expected increase in adjusted earnings, causing its stock to jump more than 3 percent in after-hours trading before declining on Tuesday.<\/p>\n","protected":false},"author":136,"featured_media":13202,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27,436],"tags":[],"class_list":["post-13198","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-spring-2015"],"yoast_head":"\nIBM earnings down, stock pops then falls - Medill Reports Chicago<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/news.medill.northwestern.edu\/chicago\/ibm-earnings-down-stock-pops-then-falls\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"IBM earnings down, stock pops then falls - 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