Back to top

Analyst Blog

After the bell Tuesday, large-cap tech company and household name IBM Corp. (IBM - Analyst Report) reported 3rd quarter 2012 earnings. The results seemed humdrum, but the reaction has been swift and severe: IBM shares have fallen roughly $7 per share in the after-market following its slight earnings miss and tepid guidance.

IBM reported quarterly earnings of $3.60 per share (discounting one-time items but including stock-based compensation), missing the Zacks Consensus Estimate of $3.62. Revenues also came in light at $24.7 billion versus the $25.4 billion expected. Further, IBM announced its full year 2012 guidance of "at least" $15.10 per share (non-GAAP), whereas the Zacks Consensus had this number pegged at $15.14 per share.

While Business Analytics and Smarter Planet revenues up 14% and 20% year to date, as expected, Systems & Technology overall revenue was down 13%. Downward currency adjustments took a chunk out of expected progress in Growth Markets, as well as overall Software sales, as IBM does a ton of business overseas.

At first blush, there doesn't seem much to propel shares downward so fast; IBM's game-plan seems intact (I'm sure Hewlett-Packard [(HPQ - Analyst Report)] wishes it had IBM's sophisticated analytics and cloud-computing businesses right about now), and progress in its data and industry collaboration efforts in smart grids, green energy, etc. making up the Smarter Planet services is quite respectable for a company that just made computers not so long ago.

Then again, IBM had just hit a new 52-week high before the bell, so perhaps traders were looking for a good reason to take some air out of IBM's balloon. That said, these days if you're a big company with a solid record of earnings surprises, missing on both the top and bottom lines while also reiterating conservative guidance is going to get your stock hammered in the near term.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%
STRATTEC SE… STRT 80.24 +3.00%