Cramer: "IBM Makes a Brilliant Misdirection Play"
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8:51am 01/15/04 [IBM] IBM SURGES $5.80, OR 6.4%, TO $96.11 IN PRE-OPEN
8:49am 01/15/04 [IBM] IBM SAYS WALL ST. 2004 EPS ESTIMATES ARE 'REASONABLE'
8:48am 01/15/04 [IBM] IBM REITERATES '04 EPS GROWTH OF LOW DOUBLE-DIGITS
8:48am 01/15/04 [IBM] IBM SEES '04 REVS ABOUT 1% AHEAD OF WALL ST. EST.
8:47am 01/15/04 [IBM] IBM SEES '04 REV GROWTH IN HIGH SINGLE DIGITS
8:46am 01/15/04 [IBM] IBM SEES '04 AS START OF IT GROWTH CYCLE
IBM reiterates 2004 EPS target (IBM)
NEW YORK (CBS.MW) -- International Business Machines (IBM) shares are rallying $5.80, or 6 percent, to $96.11 as the company issued upbeat comments on the coming fiscal year on its conference call. Chief Financial Officer John R. Joyce said Wall Street's current earnings per share forecast of $4.88 for 2004 is "reasonable." Joyce told analysts on the Dow component's conference call that 2004 will mark the beginning of a positive trend in the information technology business. IBM is expecting revenue growth in 2004 to be about 1 percent ahead of Wall Street estimates as the company benefits from a weak dollar overseas. IBM reiterated its goal of high single digit percentage growth in revenue and low double digit percentage growth in earnings per share.
IBM beats on Q4 profit, revenue - Big Blue's shares rise 6 percent in pre-open trading
By Steve Goldstein, CBS MarketWatch.com
Last Update: 8:11 AM ET Jan. 15, 2004
LONDON (CBS.MW) -- IBM on Thursday added to expectations of an improving technology climate by posting a 41 percent rise in fourth-quarter earnings, lifted by a revenue increase of 9 percent to top Wall Street forecasts.
Shares of IBM (IBM: news, chart, profile) rose $5.50 to $95.30 in pre-open trading.
The technology giant said quarterly earnings rose to $1.56 per share, up from $1.11 earned a year earlier and ahead of the Thomson First Call-derived consensus of $1.50. Fourth-quarter revenue from continuing operations were $25.9 billion, up 9 percent and also beating estimates of $25 billion.
"We enter 2004 with good momentum. The client buying environment is steadily improving," said Chairman and CEO Samuel Palmisano in a statement.
Revenues from IBM's global services business, including maintenance, increased 8 percent to $11.4 billion in the fourth quarter, with the estimated services backlog at $120 billion at the end of December.
Hardware revenue from continuing operations were $9.1 billion, an increase of 12 percent from a year ago.
Personal systems revenue increased 16 percent to $3.5 billion, primarily from higher revenues for personal computers, particularly mobile products, as increased volumes more than offset reductions in prices.
Big Blue's revenues from software were $4.3 billion, an increase of 12 percent, led by middleware growth.
Among its other divisions, global financing revenue decreased 12 percent in the fourth quarter to $734 million.
The revenue growth for IBM came across several regions, with Europe/Middle East/Africa posting the biggest percentage rise, improving 17 percent to $9.1 billion. Asia-Pacific revenue rose 13 percent to $5.4 billion, and revenue from North and South America grew 4 percent to $10.6 billion.
Total gross profit margin from continuing operations slid, however, to 38.4 percent from 38.8 percent in the 2002 fourth quarter.
Total expense and other income from continuing operations in the fourth quarter of 2003 was $6.1 billion, 6 percent lower.
8:49am 01/15/04 [IBM] IBM SAYS WALL ST. 2004 EPS ESTIMATES ARE 'REASONABLE'
8:48am 01/15/04 [IBM] IBM REITERATES '04 EPS GROWTH OF LOW DOUBLE-DIGITS
8:48am 01/15/04 [IBM] IBM SEES '04 REVS ABOUT 1% AHEAD OF WALL ST. EST.
8:47am 01/15/04 [IBM] IBM SEES '04 REV GROWTH IN HIGH SINGLE DIGITS
8:46am 01/15/04 [IBM] IBM SEES '04 AS START OF IT GROWTH CYCLE
IBM reiterates 2004 EPS target (IBM)
NEW YORK (CBS.MW) -- International Business Machines (IBM) shares are rallying $5.80, or 6 percent, to $96.11 as the company issued upbeat comments on the coming fiscal year on its conference call. Chief Financial Officer John R. Joyce said Wall Street's current earnings per share forecast of $4.88 for 2004 is "reasonable." Joyce told analysts on the Dow component's conference call that 2004 will mark the beginning of a positive trend in the information technology business. IBM is expecting revenue growth in 2004 to be about 1 percent ahead of Wall Street estimates as the company benefits from a weak dollar overseas. IBM reiterated its goal of high single digit percentage growth in revenue and low double digit percentage growth in earnings per share.
IBM beats on Q4 profit, revenue - Big Blue's shares rise 6 percent in pre-open trading
By Steve Goldstein, CBS MarketWatch.com
Last Update: 8:11 AM ET Jan. 15, 2004
LONDON (CBS.MW) -- IBM on Thursday added to expectations of an improving technology climate by posting a 41 percent rise in fourth-quarter earnings, lifted by a revenue increase of 9 percent to top Wall Street forecasts.
Shares of IBM (IBM: news, chart, profile) rose $5.50 to $95.30 in pre-open trading.
The technology giant said quarterly earnings rose to $1.56 per share, up from $1.11 earned a year earlier and ahead of the Thomson First Call-derived consensus of $1.50. Fourth-quarter revenue from continuing operations were $25.9 billion, up 9 percent and also beating estimates of $25 billion.
"We enter 2004 with good momentum. The client buying environment is steadily improving," said Chairman and CEO Samuel Palmisano in a statement.
Revenues from IBM's global services business, including maintenance, increased 8 percent to $11.4 billion in the fourth quarter, with the estimated services backlog at $120 billion at the end of December.
Hardware revenue from continuing operations were $9.1 billion, an increase of 12 percent from a year ago.
Personal systems revenue increased 16 percent to $3.5 billion, primarily from higher revenues for personal computers, particularly mobile products, as increased volumes more than offset reductions in prices.
Big Blue's revenues from software were $4.3 billion, an increase of 12 percent, led by middleware growth.
Among its other divisions, global financing revenue decreased 12 percent in the fourth quarter to $734 million.
The revenue growth for IBM came across several regions, with Europe/Middle East/Africa posting the biggest percentage rise, improving 17 percent to $9.1 billion. Asia-Pacific revenue rose 13 percent to $5.4 billion, and revenue from North and South America grew 4 percent to $10.6 billion.
Total gross profit margin from continuing operations slid, however, to 38.4 percent from 38.8 percent in the 2002 fourth quarter.
Total expense and other income from continuing operations in the fourth quarter of 2003 was $6.1 billion, 6 percent lower.
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Info
Cramer: "IBM Makes a Brilliant Misdirection Play"
"IBM Makes a Brilliant Misdirection Play"
By James J. Cramer
RealMoney Columnist
01/15/2004 09:11 AM EST
"You will not see a misdirection play this great, a play-action call this wonderful in all the NFL playoffs this weekend.
I am talking about the brilliant, fake-left-go-right play that IBM (IBM:NYSE - commentary - research) just orchestrated. First, given that the company was not supposed to report until Tuesday, there were hedgies short the January 90 calls, betting that they would go out worthless, simply because there was no news. What a great bet that looked like.
That is, until this morning.
Second, the put activity and shorting activity had been humongous as the word got out that services revenue could be as light as $14 billion.
Nope, it was $17 billion.
Finally, there had been some talk that any gain, if at all, would be from currency.
Nope. There were currency gains galore, but there also were business gains, huge business gains.
The shorts correctly played Intel (INTC:Nasdaq - commentary - research) as a company that couldn't do 64% gross margins, and correctly predicted that Yahoo! (YHOO:Nasdaq - commentary - research) wouldn't let the earnings show for still another quarter -- both stocks seem stalled or lower.
But they got IBM wrong, big wrong! And now the question is, "Will it get pinned at $95, or will it break out to $100?!?"
Nice play calling, Sam Palmisano. Too bad most of the NFL's coaching jobs just got filled. You are a natural! "
(in www.realmoney.com)
By James J. Cramer
RealMoney Columnist
01/15/2004 09:11 AM EST
"You will not see a misdirection play this great, a play-action call this wonderful in all the NFL playoffs this weekend.
I am talking about the brilliant, fake-left-go-right play that IBM (IBM:NYSE - commentary - research) just orchestrated. First, given that the company was not supposed to report until Tuesday, there were hedgies short the January 90 calls, betting that they would go out worthless, simply because there was no news. What a great bet that looked like.
That is, until this morning.
Second, the put activity and shorting activity had been humongous as the word got out that services revenue could be as light as $14 billion.
Nope, it was $17 billion.
Finally, there had been some talk that any gain, if at all, would be from currency.
Nope. There were currency gains galore, but there also were business gains, huge business gains.
The shorts correctly played Intel (INTC:Nasdaq - commentary - research) as a company that couldn't do 64% gross margins, and correctly predicted that Yahoo! (YHOO:Nasdaq - commentary - research) wouldn't let the earnings show for still another quarter -- both stocks seem stalled or lower.
But they got IBM wrong, big wrong! And now the question is, "Will it get pinned at $95, or will it break out to $100?!?"
Nice play calling, Sam Palmisano. Too bad most of the NFL's coaching jobs just got filled. You are a natural! "
(in www.realmoney.com)
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