International Business Machines Corp.

INTERNATIONAL BUSINESS MACHINES CORP., $181.63, New York symbol IBM, reported higher-than-expected earnings for the latest quarter. However, the computer maker’s revenue fell short of expectations. That caused the stock to fall 5% this week. In the three months ended September 30, 2011, IBM earned $3.8 billion. That’s up 7.0% from $3.6 billion a year earlier. The company spent $3.4 billion on share buybacks in the latest quarter. Due to fewer shares outstanding, earnings per share rose 13.1%, to $3.19 from $2.82. If you exclude unusual items, mainly costs to integrate acquisitions, IBM’s earnings per share would have risen 15.1%, to $3.28 from $2.85. On this basis, the latest earnings beat the consensus estimate of $3.22 a share. Revenue rose 7.8%, to $26.2 billion from $24.3 billion. That was less than the consensus estimate of $26.3 billion. If you exclude the positive impact of foreign-exchange rates, revenue would have risen 3%....

We still think investors will profit most — and with the least risk — by buying shares of well-established, dividend-paying stocks with strong business prospects. These are companies that have strong positions in healthy industries. They also have strong management that will make the right moves to remain competitive in a changing marketplace. Stocks like these give investors an additional measure of safety in today’s volatile markets. And the best ones offer an attractive combination of low p/e’s (the ratio of a stock’s price to its per-share earnings), steady or rising dividend yields (annual dividend divided by the share price) and promising growth prospects....

A long-time reader and portfolio-management client recently asked a question that other investors may wonder about in today’s turbulent markets. He wrote, “You constantly remind members to have a balanced portfolio and strategy for long-term success when investing. But when do you take profits? You have mentioned a couple of times to sell, such as when a stock makes up too much of your total portfolio, or if a company shows questionable management or business decisions. My main question is why don’t we sell when stocks move up and there are profits to be had?” I often asked myself that question in my first decade or two in the investment business. In hindsight, it always seems easy to spot market tops and market bottoms. But trying to spot those tops and bottoms as they occur is harder. I investigated all sorts of market theories and signals that purport to tell you how to do it. They all seem to have “worked,” at least some of the time. But none worked consistently....

International Business Machines Corp., New York symbol IBM, is the world’s biggest computer company. As one of the oldest tech stocks in the industry, IBM has been able to adapt itself to changes over the years. 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 and other U.S. tech stocks in Wall Street Stock Forecaster, our newsletter that gives you stock trading information and advice on U.S. companies....

AT&T INC., $28.05, New York symbol T, fell 3% this week after the Department of Justice said it would launch a court challenge to block the company’s deal to buy rival wireless carrier T-Mobile from Germany’s Deutsche Telekom AG. Adding T-Mobile would make AT&T the largest wireless carrier in the U.S., with 132 million subscribers. Regulators feel that the purchase would give AT&T too much control over the wireless market, and lead to higher rates for customers. AT&T is paying $39 billion ($25 billion in cash, and $14 billion in stock) for T-Mobile. That’s equal to 23% of AT&T’s $166.2-billion market cap. If the deal falls through, AT&T will pay Deutsche Telekom $3 billion, and give it the rights to some of its wireless spectrum....

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....

INTERNATIONAL BUSINESS MACHINES CORP., $185.18, New York symbol IBM, reported higher-than-expected earnings for the latest quarter. In the three months ended June 30, 2011, the company earned $3.7 billion. That’s up 8.2% from $3.4 billion a year earlier. IBM spent $4.0 billion on share buybacks in the latest quarter. Due to fewer shares outstanding, earnings per share rose 14.9%, to $3.00 from $2.61. If you exclude unusual items, mainly costs to integrate acquisitions, IBM’s earnings per share would have risen 17.9%, to $3.09 from $2.62. On this basis, the latest earnings beat the consensus estimate of $3.03 a share....

INTERNATIONAL BUSINESS MACHINES CORP. $170 (New York symbol IBM, Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.2 billion; Market cap: $204.0 billion; Price-to-sales ratio: 2.0; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.ibm.com) has raised its quarterly dividend by 15.4%, to $0.75 a share from $0.65. The new annual rate of $3.00 yields 1.8%. This is the 16th consecutive year that IBM has raised its dividend. The computer maker also plans to buy back $8 billion of its common shares. Combined with $4.7 billion remaining on its previous authorization, IBM can now buy back $12.7 billion of its stock. That’s equal to 6% of its market cap. IBM is a buy.

International Business Machines Corp., symbol IBM on New York, reported higher-than-expected earnings in the latest quarter. In the three months ended March 31, 2011, the large cap stock’s earnings rose 10.1%, to $2.9 billion from $2.6 billion a year earlier. Earnings per share rose 17.3%, to $2.31 from $1.97, on fewer shares outstanding. Excluding one-time items, such as costs related to acquisitions, IBM earned $2.41 a share. On that basis, the latest earnings beat the consensus estimate of $2.29. Revenue rose 7.7%, to $24.6 billion from $22.9 billion a year earlier. That was higher than the consensus revenue estimate of $24.0 billion. Revenue from Brazil, Russia, India and China (which together account for 21% of IBM’s overall revenue), jumped 26%. The company is also seeing strong demand for its new System Z mainframe computer....

PLEASE NOTE: Our next Hotline will go out on Friday, April 29, 2011. INTERNATIONAL BUSINESS MACHINES CORP., $168.28, New York symbol IBM, reported higher-than-expected earnings this week. In the three months ended March 31, 2011, IBM’s earnings rose 10.1%, to $2.9 billion from $2.6 billion a year earlier. Earnings per share rose 17.3%, to $2.31 from $1.97, on fewer shares outstanding. Excluding one-time items, such as costs related to acquisitions, IBM earned $2.41 a share. On that basis, the latest earnings beat the consensus estimate of $2.29....