IBM released its 1QFY15 results on Monday after market close and reported earnings per share of $2.91 and $19.6 billion in revenue falling short of analysts’ estimate of $19.7 billion.
International Business Machines reported its first quarter of fiscal year 2015 earnings on Monday April 20 at market close. It was a diverse quarter despite exchange rate volatility.
Analysts predicted IBM to post adjusted earnings per share of around $2.82 on $19.7 billion sales. Earnings of the company increased by 9% on a year over year basis and stood at $2.91 each share from $2.68 in a period earlier. Without including the impact of currency exchange and divestment business segments, IBM revenue was stable at $19.6 billion, decreased by 12%.
The strengthening US dollar was the biggest problem with the company; however currency impact surpassed every estimate and update that the company delivered to its shareholders. Lastly, business division sales cut the revenue of IBM by almost 4% while exchange rate volatility caused slowdown by 8%.
As reported by Thomson Reuters, Wall Street had forecasted the company to report quarterly earnings of $2.80 per share on revenue of $19.64 billion, the results were the 8th time in the last nine quarters that big blue company failed to meet analysts’ expectations. Adjusted sales of IBM rose by 2% on the Y-o-Y basis in United States but plunged by 2% internationally.
The Technology Company gross margin increased by$49.3% from the previous year 48.5%. Operating margin of the company surged by 18.4% compared to 15.8% last year.
International Business Machines restated its future guidance for the fiscal year of earnings of $16.12 per share.
Ginni Rometty, CEO of IBM said in a statement, "We had a strong start to the year. Our strategic imperatives growth rate accelerated, demonstrating the power of our offerings in these new opportunities and contributing to improved revenue performance. Our focus on higher value through portfolio transformation and investment in key areas of the business drove continued margin expansion."
Twenty-three covered IBM stock, out of which two have given Buy rating while one gave it strong buy rating. While 16 analysts assigned hold rating to the stock.
At market close on Monday April 20, IBM stock was up by 3.42% to $166.16 and went further up by 0.20% during after hour trading and reached $166.50 at 07:59 PM EDT.
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