International Business Machines Corp.
New York symbol IBM, is the world’s largest computer company. It specializes in large mainframe computers for governments and corporations.
INTERNATIONAL BUSINESS MACHINES CORP. $192 (New York symbol IBM, Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.1 billion; Market cap: $211.2 billion; Price-to-sales ratio: 2.1; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.ibm.com) started up in 1911, which makes it the world’s oldest computer company. Today, it operates in over 170 countries.
IBM continues to shift out of less profitable businesses, like making personal computers, and toward more promising activities, such as designing computer systems and managing them for clients. Long-term maintenance contracts give IBM more dependable revenue streams; services now supply 56% of its sales.
The company is also expanding its software business. It’s particularly interested in developing analytics software, which helps businesses and governments gather and analyze a wide variety of data. For example, IBM’s Smarter Planet initiative combines advanced hardware and software to help clients solve complex problems, such as traffic congestion. Software supplies 24% of IBM’s revenue.
...
IBM continues to shift out of less profitable businesses, like making personal computers, and toward more promising activities, such as designing computer systems and managing them for clients. Long-term maintenance contracts give IBM more dependable revenue streams; services now supply 56% of its sales.
The company is also expanding its software business. It’s particularly interested in developing analytics software, which helps businesses and governments gather and analyze a wide variety of data. For example, IBM’s Smarter Planet initiative combines advanced hardware and software to help clients solve complex problems, such as traffic congestion. Software supplies 24% of IBM’s revenue.
...
INTERNATIONAL BUSINESS MACHINES CORP. $205 (New York symbol IBM, Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.1 billion; Market cap: $225.5 billion; Price-to-sales ratio: 2.1; Dividend yield: 1.7%; TSINetwork Rating: Above Average; www.ibm- .com) has gained 6.8% since we named it last year’s top pick at $192 in our February 2012 issue.
Demand for the company’s software is rising....
Demand for the company’s software is rising....
INTERNATIONAL BUSINESS MACHINES CORP. $205 (New York symbol IBM, Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.1 billion; Market cap: $225.5 billion; Price-to-sales ratio: 2.1; Dividend yield: 1.7%; TSINetwork Rating: Above Average; www.ibm- .com) has gained 6.8% since we named it last year’s top pick at $192 in our February 2012 issue.
Demand for the company’s software is rising. However, the slow global economy is hurting demand for its mainframe computers and computer services. As a result, IBM’s overall revenue fell 2.3% in 2012, to $104.5 billion from $106.9 billion in 2011.
The company earns higher profits on software and services than from selling computer hardware. That’s the main reason why its earnings rose 8.0% in 2012, to $17.6 billion from $16.3 billion. IBM spent $12.0 billion on share buybacks during the year. Due to fewer shares outstanding, earnings per share rose 13.5%, to $15.25 from $13.44.
...
Demand for the company’s software is rising. However, the slow global economy is hurting demand for its mainframe computers and computer services. As a result, IBM’s overall revenue fell 2.3% in 2012, to $104.5 billion from $106.9 billion in 2011.
The company earns higher profits on software and services than from selling computer hardware. That’s the main reason why its earnings rose 8.0% in 2012, to $17.6 billion from $16.3 billion. IBM spent $12.0 billion on share buybacks during the year. Due to fewer shares outstanding, earnings per share rose 13.5%, to $15.25 from $13.44.
...
GOOGLE INC., $681.79, Nasdaq symbol GOOG, reported lower-than-expected earnings this week, mainly due to higher costs following its acquisition of cellphone maker Motorola Mobility in May 2012. The company is also earning less per online ad. These factors caused the stock to fall 8%. In the three months ended September 30, 2012, earnings fell 20.3%, to $2.2 billion, or $6.53 a share. It earned $2.7 billion, or $8.33 a share, a year earlier. If you exclude costs to integrate Motorola and other unusual items, earnings per share would have fallen 7.1%, to $9.03 from $9.72. That missed the consensus estimate of $10.63 a share. Revenue in the quarter jumped 45.1%, to $14.1 billion from $9.7 billion. Motorola accounted for 59% of the increase....
INTERNATIONAL BUSINESS MACHINES CORP., $207.45, New York symbol IBM, continues to expand its software business. In the three months ended June 30, 2012, software accounted for 24% of its total revenue and 43% of its pre-tax earnings. This week, the company paid an undisclosed sum for U.K.-based Butterfly Software Ltd. Businesses use this private firm’s software to collect data from older computers and securely transfer it to remote servers. Butterfly’s products nicely complement IBM’s growing analytics software operations, which help companies quickly gather and analyze a wide range of information....
APPLE INC., $665.24, Nasdaq symbol AAPL, has won a patent-infringement lawsuit against South Korea-based Samsung Electronics. The jury decided that Samsung copied some features of Apple’s popular iPhone smartphones and iPad tablet computers. As a result, it will have to pay Apple $1.05 billion in damages. To put this award in context, Apple held cash and investments of $117.2 billion, or $125.07 a share, on June 30, 2012. In addition to the damages, Apple wants the court to ban certain Samsung products in the U.S. The ruling could help boost Apple’s market share, at least temporarily. However, this decision mainly applies to older Samsung products, and the company will likely modify its current devices to avoid violating Apple’s patents....
INTERNATIONAL BUSINESS MACHINES CORP. $197 (New York symbol IBM, Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.1 billion; Market cap: $216.7 billion; Price-to-sales ratio: 2.1; Dividend yield: 1.7%; TSINetwork Rating: Above Average; www.ibm.com) is paying an undisclosed sum for Texas Memory Systems. The deal should close by the end of 2012. Privately held Texas Memory specializes in solid-state computer storage drives. Unlike regular hard drives, these are flash-memory drives with no moving parts. As a result, they use less energy and let computers access data quicker. This technology should speed up IBM’s mainframes and enhance its analytics software, which helps businesses and governments quickly gather and analyze huge amounts of data. IBM is our #1 buy for 2012.
INTERNATIONAL BUSINESS MACHINES CORP. $197 (New York symbol IBM, Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.1 billion; Market cap: $216.7 billion; Price-to-sales ratio: 2.1; Dividend yield: 1.7%; TSINetwork Rating: Above Average; www.ibm.com) is paying an undisclosed sum for Texas Memory Systems. The deal should close by the end of 2012.
Privately held Texas Memory specializes in solid-state computer storage drives. Unlike regular hard drives, these are flash-memory drives with no moving parts. As a result, they use less energy and let computers access data quicker. This technology should speed up IBM’s mainframes and enhance its analytics software, which helps businesses and governments quickly gather and analyze huge amounts of data.
IBM is our #1 buy for 2012.
...
Privately held Texas Memory specializes in solid-state computer storage drives. Unlike regular hard drives, these are flash-memory drives with no moving parts. As a result, they use less energy and let computers access data quicker. This technology should speed up IBM’s mainframes and enhance its analytics software, which helps businesses and governments quickly gather and analyze huge amounts of data.
IBM is our #1 buy for 2012.
...
INTERNATIONAL BUSINESS MACHINES CORP., $192.45, New York symbol IBM, reported higher-than-expected earnings for the latest quarter. It also raised its earnings forecast for all of 2012. That’s why the stock rose 3% this week. In the three months ended June 30, 2012, the company earned $3.9 billion. That’s up 5.9% from $3.7 billion a year earlier. IBM spent $3.0 billion on share buybacks in the latest quarter. Due to fewer shares outstanding, earnings per share rose 11.3%, to $3.34 from $3.00. Without unusual items, mainly costs to integrate recently purchased companies, IBM’s earnings per share would have risen 13.6%, to $3.51 from $3.09. On this basis, the latest earnings beat the consensus estimate of $3.43 a share....
The uncertain economy and weak consumer confidence have held back computer sales. However, demand should increase in the next few months, particularly as businesses look to boost their productivity by upgrading their computers. In addition, rising interest in cloud computing will increase sales of mainframe computers, servers and consulting services. APPLE INC. $575 (Nasdaq symbol AAPL; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 935.1 million; Market cap: $537.7 billion; Price-to-sales ratio: 3.8; Dividend yield: 1.8%; TSINetwork Rating: Average; www.apple.com) is now the largest publicly traded company in the world based on market cap, thanks to the huge success of its mobile devices, such as the iPhone smartphone and the iPad tablet computer. These products are also attracting more attention to Apple’s Mac desktop and laptop computers. In its 2012 second quarter, which ended March 31, 2012, the company sold 11.8 million iPads, up 151.3% from a year earlier. iPhone sales jumped 88.0%, to 35.1 million units. That’s partly because the company recently signed new deals that let more Chinese wireless carriers sell the device....