Stock trading information: IBM earnings jump in latest quarter

International Business Machines Corp., symbol IBM on New York, is the world’s biggest computer company. In the past few years, IBM has shifted its focus from making computers to designing computer systems and managing them on behalf of clients. We analyze IBM in Wall Street Stock Forecaster, our newsletter that gives you stock trading information and advice on U.S. companies. In the three months ended June 30, 2011, IBM earned $3.7 billion. That’s up 8.2% from $3.4 billion a year earlier. Earnings per share rose 14.9%, to $3.00 from $2.61, on fewer shares outstanding. If you exclude unusual items, mainly costs to integrate acquisitions, IBM’s earnings per share rose 17.9%, to $3.09 from $2.62. On this basis, the latest earnings beat the consensus estimate of $3.03 a share. Revenue rose 12.4% in the quarter, to $26.7 billion from $23.7 billion. That was higher than the consensus revenue estimate of $25.4 billion. IBM gets two-thirds of its revenue from overseas markets. If you adjust for foreign-currency rates, revenue would have risen by 5%. Revenues from Brazil, Russia, India and China jumped 27%. Growth markets, including those four countries, accounted for 22% of IBM’s total revenue. IBM signed $1.3 billion of new service contracts in the quarter. That’s up 16% from a year earlier. On June 30, 2011, IBM’s order backlog was $144 billion, up 11.6% from a year earlier. That’s 1.3 times its annual revenue. Hardware revenue rose 17.5%, with sales of the company’s new System Z mainframe computer jumping 61%. IBM is a dividend paying stock. Its annual rate of $3.00 per share yields 1.6%. You can get our latest analysis and stock trading information, including our clear buy/sell/hold advice, on IBM and dozens of other U.S. stocks you may be considering buying in Wall Street Stock Forecaster. What’s more, you can get one month of this stock trading information free when you subscribe today. Click here to learn how.

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Jim Bates

Jim is an associate editor at TSI Network. He is the lead reporter and analyst for The Successful Investor and Wall Street Stock Forecaster and a member of the Investment Planning Committee. Jim has held the Chartered Financial Analyst designation since 1992 and spent more than a decade at the Financial Post DataGroup before joining TSI Network. He has a Bachelor of Commerce degree from the University of Toronto.

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