IBM earnings beat Street but business-spending worries haunt shares

Looking over the IBM earnings call transcript for the third quarter of 2009, it's really hard to find much to fault with the company's efforts. But you can't squeeze blood from a stone and IBM (IBM) shares were sold off on October 16 to the tune of 4.3 percent by concerned investors. Big Blue, despite cutting costs and boosting margins, failed to grow top line revenues. Revenues fell on a constant currency basis by 5 percent. That signaled that enterprise technology spending was not yet set for a recovery.

Even worse, IBM CFO Mark Loughridge used the "s" word -- stabilize -- to describe the enterprise technology markets. He might as well have used that other s-word. Investors, who had bid up IBM shares by $10 in the past two weeks from $117 to $127, wanted more than stabilization from IBM.