Our Top Technology Buy

Article Excerpt

IBM $82 (New York symbol IBM; SI Rating: Above average) is the world’s biggest supplier of computers and information processing services. In the past few years, IBM has shifted its focus from computer hardware to computer services and software, which provide it with steadier, more profitable revenue streams. As well, a large portion of the company’s overall business is through long-term contracts, which also lends stability to its sales and earnings. IBM made $0.94 a share in the three months ended September 30, 2005, up 2.2% from $0.92 a share a year earlier. (All figures in U.S. dollars.) If you disregard one-time charges, IBM earned $1.26 a share in the 2005 third quarter. Revenues fell 7.8% to $21.5 billion from $23.3 billion. However, if you exclude discontinued operations, total revenue grew 4%. IBM’s research spending of $1.4 billion in the latest quarter represented 6.7% of revenues. High research spending will let it keep adding new products that will eventually add to sales and…

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