IBM Shares Down 6% After Earnings
17 Ottobre 2019 - 05:04PM
Dow Jones News
By Michael Dabaie
International Business Machines Corp. (IBM) shares fell 6% to
$133.50 in heavy morning volume.
The company Wednesday reported third-quarter revenue of $18
billion, down from $18.8 billion in the year-ago quarter. FactSet
consensus was for $18.2 billion. IBM said revenue for Red Hat was
up 19% normalized for historical comparability. IBM's acquisition
of Red Hat closed in July.
Adjusted per-share earnings came to $2.68, ahead of the FactSet
consensus for $2.66.
Global Technology Services, which includes infrastructure and
cloud services and technology support services, revenue of $6.7
billion was down 5.6%, IBM said.
"The underperformance of the legacy software portfolio likely
reflects some cannibalization from [Red Hat] as well as secular
headwinds to their middleware and database products," Stifel
analysts said in a note. Stifel rates IBM at Buy with a $169 price
target.
Morgan Stanley said its unchanged $170 price target on IBM
reflects lower core IBM growth and peer multiple, offset by faster
Red hat growth and lower debt. Morgan Stanley rates the stock
Overweight.
Nomura/Instinet said it cut its price target to $170. "IBM's
[Global Technology Services] outsourcing unit fared materially
worse in 3Q, which drags our 4Q and 2020 estimates lower," the
Nomura/Instinet note said.
Write to Michael Dabaie at michael.dabaie@wsj.com
(END) Dow Jones Newswires
October 17, 2019 10:49 ET (14:49 GMT)
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