International Business Machines Corp. (NYSE:IBM) released its earnings report for the three month period through June 2013 this afternoon after the market closed. The company showed earnings of $3.91 per share for the quarter on revenues totaling $24.92 billion. On today’s market, stock in International Business Machines Corp. (NYSE:IBM) trended upward and finished the day at $194.54.
In the run up to the announcement of these earnings numbers, analysts following the computer company were looking for earnings of $3.77 per share for the period. Consensus revenue estimates came to $25.3 billion in anticipation of this earnings release.
In the same three months of 2012, International Business Machines Corp. (NYSE:IBM) earned $3.51 per share on quarterly revenue of $$25.8 billion. Today’s earnings report is important in establishing a trend after IBM disappointed on both earnings and revenue in the first quarter of 2013.
IBM’s Macroeconomic Problems
It’s become a common thread in recent years for multinationals to blame international markets for their under-performance in weak quarters. International Business Machines Corp. (NYSE:IBM) will more than likely continue this narrative in explaining today’s results. IT spending is having a difficult time across the world.
Europe is still suffering from massive economic problems, and the slowing of investment in many emerging economies, like China, are having a detrimental effect on IBM business. Despite that softness, IBM is still expected to put up a much better full year profit in 2013. The company has taken direct aim at its large workforce in order to alleviate the pressures on its earnings numbers.
IBM Share Performance, Little Room To Fail
International Business Machines Corp. (NYSE:IBM) is one of the biggest companies on the market. Despite that, analysts expect the company to grow its earnings substantially in the coming years. The problem for shareholders is that much of this expected growth is already priced in, leaving International Business Machines Corp. (NYSE:IBM) little room to fail.
That’s one of the reasons the company’s shares have done so poorly in 2013, gaining just 1.3% since January 1. The firm grew directly in line with the S&P 500 until its disappointing earnings report in April. Failure at IBM is not tolerated.
International Business Machines Corp. (NYSE:IBM) is still doing very well. IBM is not the best bet for a growth stock, but for an ancient computer company it manages itself well and it’s undeniably stable. That’s what some investors want.