Analysts Offer Mixed Ratings On IBM After Weak Q4 Results
Uri Gruenbaum | Jan 22, 2015 07:28AM ET
IBM (NYSE:IBM) posted its fourth quarter fiscal 2014 earnings report on Tuesday January 20th, revealing another weak quarter in terms of revenue growth. As a result, investors are becoming less and less hopeful of the company’s ability to transition its hardware businesses to the cloud in a successful manor.
Highlights from the report include revenue of $24.1 billion, which was short of the $24.77 billion analyst consensus estimate. Earnings came in at $5.81 per share, down 4% from last year. However, earnings still came in ahead of the analyst consensus by $0.40, while net income from continuing operations fell 11% to $6.2 billion for the quarter.
“We are making significant progress in our transformation, continuing to shift IBM’s business to higher value, and investing and positioning ourselves for the longer term,” CEO Ginni Rometty said in a statement.
IBM has been diligently trying to catch up to competitors with its cloud computing business, posting revenue of $7 billion from the cloud in 2014. However, IBM says that the cloud is not yet scalable enough to offset narrower margins.
“For 2015, specifically, we are dealing with some transitions in our business,” Martin Schroeter, IBM’s chief financial officer, said on a conference call with analysts. “For example, while we are fully participating in the shift to cloud, margins are impacted by the level of investment we’re making and the fact that the business is not yet at scale. We will see some year-to-year benefit to margins in 2015 as the business ramps, but we won’t be at scale.”
Following IBM’s Q4 report, Cantor Fitzgerald analyst TipRanks is Hold.
Disclosure: All analyst rankings for IBM sourced from TipRanks.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.