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HenryTo
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 Posted: Thu Apr 19, 2012 2:02 am Post subject: |
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Morningstar on IBM's 1Q earnings.
| Quote: | | IBM's first-quarter results were in line with our expectations. We are maintaining our revenue forecast for the year, and our fair value estimate is unchanged. Overall revenue increased 1% year over year at constant currency, as 7% growth in software sales offset a 6% decline in hardware sales. The decline in hardware sales was led by a 24% decrease in sales of IBM's System z mainframes, which was not a surprise given the current stage of the product cycle and the 38% year-over-year spike in System z revenue seen during the year-ago period. Services revenue increased 1% year over year as continuing weakness in Japan and public sector spending weighed on the results of the global business services segment. IBM's overall services backlog was $139 billion, an increase of 1% year over year excluding the effects of currency movements. IBM announced its new PureSystems server platform last week in what we view as a competitive response to Cisco's CSCO successful UCS servers. The new systems feature integrated processing, storage, and networking and offer customers a rapid way to deploy compute infrastructure (PureFlex) or new applications (PureApplication). The PureSystems platform supports IBM's proprietary Power processors and Intel's INTC Xeon server processors running IBM's AIX, Microsoft's MSFT Windows Server, or the Linux operating systems, making it attractive for a wide variety of applications. We expect PureSystems to improve IBM's competitive win rates against Cisco's UCS servers and also drive growth in sales of IBM's storage and networking products, since they are an intrinsic part of the integrated systems. |
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HenryTo
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| Posted: Fri Jan 20, 2012 4:56 pm Post subject: |
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Morningstar on IBM's 4Q earnings.
| Quote: | | IBM's IBM fourth-quarter performance was in line with our expectations. Overall revenue grew 1% year over year at constant currency, as 9% growth in software sales offset an 8% decline in systems and technology division (hardware) sales. The shift in revenue mix toward high-margin software sales coupled with continued improvements in services business margins drove pretax margins to 24.7%. The weakness in hardware sales was expected, as mainframe sales were up against a tough comparison with the new mainframe launch in the latter half of 2010. Although mainframe sales declined 31% year over year, sales of power systems grew 6% as IBM continued to displace Hewlett-Packard's HPQ Itanium-based servers and Oracle/Sun's ORCL SPARC servers. Management claimed more than 1,000 competitive displacements amounting to more than $1 billion in revenue for IBM in 2011. While the competitive wins by power systems over the past few years have indeed been impressive, Oracle's recent integrated appliance strategy could stem the hardware market share losses and perhaps even reverse the trend if the firm's bundled hardware plus software strategy resonates with customers. We think IBM's power systems sales could come under pressure over the next year as customers consider the value proposition of Oracle's integrated products. The services business delivered 3% year-over-year growth, with global technology services and global business services each growing at 3% in the quarter. GBS revenue continued to be weighed down by weakness in Japan and the public sector; management claimed an 8% growth rate for GB S excluding these areas. New business signings were down 8% year over year because of weak outsourcing business, but the overall services backlog was flat at constant currency compared with the prior year at $141 billion. We view the stability in backlog as more important than the signings numbers for the quarter, which are often volatile. |
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HenryTo
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Location: Los Angeles, California
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| Posted: Tue Oct 18, 2011 11:22 pm Post subject: |
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Morningstar on IBM's 3Q earnings:
| Quote: | | IBM's third-quarter performance was in line with our expectations. Overall revenue increased 3% year over year, driven by 13% growth in revenue from emerging markets, excluding the effects of currency movements. IBM's Japan business, which accounted for 11% of revenue in 2010, reported a 10% revenue decline as transactional business in the global business services segment remained weak because of the natural disaster in that country earlier in the year. Software sales led the quarter with 8% year-over-year constant currency revenue growth, driven by 47% growth in sales of WebSphere family products. The high reported growth rate was significantly helped by the acquisitions of Sterling Commerce, Unica, and Coremetrics in 2010; we expect growth to slow in the next quarter. Nevertheless, management indicated a strong pipeline for the software segment and expects software sales to remain robust for the remainder of the year. After four consecutive quarters of double-digit growth, systems and technology segment sales slowed in line with our expectations, as the firm completed one year since the launch of the new mainframe. The segment reported 1% overall year-over-year revenue growth excluding the effects of currency movements, with 12% growth in sales of power systems products offsetting a 7% decline in mainframe sales. The reported decline in mainframe sales is not surprising, given the 17% growth in the prior-year quarter, and we expect a steeper decline in the fourth quarter as the business faces an even tougher year-over-year comparison. Overall the mainframe cycle appears healthy, and manage ment indicated that demand for mainframes in developing markets remains particularly strong; developing markets account for 30% of the 80 new mainframe customers added in the current mainframe cycle. The performance of the services businesses was weak, with 3% year-over-year growth in global technology services revenue while global business services revenue remained flat, excluding the effects of currency movements. Management attributed the GBS weakness to performance in Japan and tight public sector spending, which cumulatively accounts for about a third of GBS sales. New business signings increased 6% and the services backlog increased $2 billion from the prior-year quarter to $137 billion. We are slightly concerned that a weak economy could pressure services signings in the fourth quarter, resulting in a decline in the services backlog, although management expressed confidence that GTS and GBS are both well positioned to grow through the end of the year. |
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rffrydr
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| Posted: Tue Jul 19, 2011 4:04 pm Post subject: |
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75 Dow pts today. Makin' plans, selling to governments and just getting on with it.
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Today is the Tomorrow you worried about Yesterday! |
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HenryTo
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Location: Los Angeles, California
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| Posted: Tue Jul 19, 2011 11:30 am Post subject: |
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Morningstar on IBM's 2Q earnings. Note its stock is up about 50% over the past year:
| Quote: | | IBM reported solid second-quarter performance with 5% year-over-year growth in revenue excluding the effects of currency movements. Revenue growth was driven by strong demand in growth markets, which grew 13% at constant currency and accounted for more than 21% of IBM's total revenue. The systems and technology segment delivered 12% year-over-year growth at constant currency, fueled by 53% growth in sales of the System z mainframe. Demand for System z appears to be strong in developed as well as growth markets, and management said 24 of 68 net new mainframe customers acquired in the current product cycle are in growth mar kets. The high growth rate also reflects weak sales in the year-ago period as customers delayed purchases in anticipation of the launch of the new mainframe. We expect year-over-year mainframe growth to slow in the latter half of the year because of tougher comparisons with the launch of the new mainframe in the prior-year period. Software segment sales grew 10% year over year at constant currency led by 47% growth in WebSphere family sales. Although demand for the WebSphere product was solid, the reported growth benefited significantly from the inclusion of revenue from recent acquisitions including Sterling Commerce, Unica, and Coremetrics. Sales of Netezza analytics appliances also contributed to the strong software segment growth, as management reported a 70% increase in Netezza transaction volume compared with the prior-year period. While the contribution from acquisitions tempers our enthusiasm about the reported sales growth, we see acquisitions of small technology-fo cused companies as a reasonable growth strategy for IBM and a key driver of the firm's expected earnings growth over the next few years. Services signings were strong, with outsourcing and transactional signings growing 8% and 7% year over year, respectively, excluding the effects of currency movements. The growth in signings is a welcome change from the declines reported last quarter, although we would remind investors that signings can be lumpy and backlog is a better metric to judge the health of IBM's services business, in our opinion. The overall backlog grew a little over 1% at constant currency over the prior-year quarter, in part because of weakness in the public sector and in Japan. |
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HenryTo
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Location: Los Angeles, California
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| Posted: Thu Apr 21, 2011 2:53 am Post subject: |
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Morningstar on IBM's 1Q earnings:
| Quote: | | IBM's IBM first-quarter revenue and profits were in line with our expectations. Total revenue grew 5% year over year excluding the effects of currency movements, driven by 16% growth in the systems and technology segment. The mainframe product cycle remains robust, and System z sales grew 38% year over year on strong demand in developed and emerging markets. The high growth rate reflected weak sales in the year-ago period as customers delayed purchases in anticipation of the launch of the new mainframe. Revenue from power systems grew a healthy 17%, about twice the growth rate of the overall Unix systems market in the quarter , according to management. Contributions from acquisitions drove 8% year-over-year growth in software segment sales, excluding the impact of the divestiture of the product lifecycle management business in early 2010. Management's long-term earnings per share targets rely on significant growth in high-margin software sales, and acquisitions of smaller distribution-constrained software companies is a key tool to drive profitable growth. Services signings in the quarter were below our expectations, but the services backlog remained stable at $142 billion. Outsourcing and transactional signings declined 30% and 5% year over year, respectively, excluding the effects of currency movements. Management attributed the low level of transactional signings to weakness in the public sector and indicated a mid-single-digit growth in signings for the rest of the segment. Although the weakness in signings is a bit troubling, we would remind investors that quarterly signings can be quite volatile, as evidenced by 18% year-over-year growth in IBM's services signings in the fourth quarter of 2010. That said, IBM does need to maintain and increase its services backlog, and the stability on this front alleviates some of our concern. |
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rffrydr
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HenryTo
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Posts: 11735
Location: Los Angeles, California
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| Posted: Wed Jan 19, 2011 9:08 pm Post subject: |
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Morningstar on IBM's 4Q earnings:
| Quote: | | IBM delivered strong fourth-quarter performance with revenue increasing 7% year over year, driven by 72% growth in System z (mainframe) revenue, excluding the effects of currency movements. More important, global services signings rebounded nearly 18% to about $22 billion in the quarter, reversing three consecutive quarters of year-over-year declines. The strong signings drove the backlog to a healthy $142 billion and bode well for revenue in fiscal 2011. Growth in high-margin software and hardware sales outpaced lower-margin global services revenue in the quarter, resulting in a 70-basis-point year-over-year improvement in gross margins. Software revenue grew 12% year over year at constant currency, excluding the impact of the divestiture of the product lifecycle management business earlier last year. Systems and technology segment revenue was up 22% over the same period largely because of pent-up demand for IBM's new System z mainframe. Reported revenue was in line with our expectations, but earnings in the quarter and management's earnings forecast for fiscal 2011 were ahead of our forecasts. We will revisit our assumptions and expect to raise our fair value estimate. |
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HenryTo
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Posts: 11735
Location: Los Angeles, California
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| Posted: Tue Oct 19, 2010 10:32 pm Post subject: |
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Morningstar on IBM's 3Q earnings:
| Quote: | | IBM reported solid third-quarter financial results Monday, but we are slightly concerned about continuing weakness in new business signings. At $5.7 billion, outsourcing signings were at levels not seen since the third quarter of 2006. Management indicated that reported signings could have been much higher if a $1.8 billion deal signed Oct. 8 had closed a few days earlier. However, management had partially attributed weakness in second-quarter signings to similar contract slippage, which should have contributed positively to the third-quarter numbers. That said, signings often tend to be lumpy rather than smooth, and we are maintaining our near-term revenue forecasts. Growth in hardware sales outpaced other segments, causing operating margins to remain flat sequentially despite lower expenses. The new System z mainframe appears to be off to a decent start, with revenue rising 17% year over year adjusted for currency movements. The mainframe launched late in the quarter, and we expect higher near-term growth rates over the next few quarters. Software revenue grew 6% year over year at constant currency, excluding the impact of the divestiture of the product lifecycle management business earlier this year. We are maintaining our near-term operating forecasts, but management lowered expectations for the firm's long-term effective tax rate. We expect to raise our fair value estimate about 5% to account for the lower tax rate as well as cash earned since our last report. |
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rffrydr
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HenryTo
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HenryTo
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rffrydr
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Joined: 30 Oct 2005
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| Posted: Mon Jul 05, 2010 10:58 pm Post subject: |
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"Hiding in Plain Sight,"....isn't that the truth! Freudian slip by author should read, "....a buyer today should [NOT] be able to achieve excess returns. Miller living his own age-bias.
Do like those ads in Bizweek. We had our IBM moment May at this time before getting swamped. They've got a huge high-margin revenue stream in their pre-paid "subscriptions services" which gives these guys alot of flex. And there's a wide wide moat around those super-duper computers.
It's only the brainwash mentality that'd keep me from owning this....but that doesn't mean I can root for 'em. 
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HenryTo
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rffrydr
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