IBM Beats Analyst Estimates on EPS

Seth Jayson, The Motley Fool
Updated

IBM (NYS: IBM) reported earnings yesterday. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), IBM met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue was unchanged and GAAP earnings per share improved.


Margins improved across the board.

Revenue details
IBM booked revenue of $24.67 billion. The 19 analysts polled by S&P Capital IQ wanted to see sales of $24.81 billion on the same basis. GAAP reported sales were 0.3% higher than the prior-year quarter's $24.61 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $2.78. The 20 earnings estimates compiled by S&P Capital IQ predicted $2.65 per share on the same basis. GAAP EPS of $2.61 for Q1 were 13% higher than the prior-year quarter's $2.31 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 45.1%, 100 basis points better than the prior-year quarter. Operating margin was 15.8%, 10 basis points better than the prior-year quarter. Net margin was 12.4%, 80 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $26.62 billion. On the bottom line, the average EPS estimate is $3.42.

Next year's average estimate for revenue is $108.64 billion. The average EPS estimate is $14.93.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 4,095 members out of 4,514 rating the stock outperform, and 419 members rating it underperform. Among 999 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 935 give IBM a green thumbs-up, and 64 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on IBM is outperform, with an average price target of $203.12.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of International Business Machines. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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