Add a New Bulls Reason

Company: International Business Machines (IBM)
Current price:
Headline: (100 character max)
Analysis:
Cancel
93%
agree
411 votes

  Wide international footprint

IBM's revenue is widely distributed across the globe protecting it from economic downturns in single countries.

(100 character max) Cancel
83%
agree
61 votes

  Exiting PC business has helped keep margins high

IBM wised up early to the commoditization of PCs and got out of the market before its competitors Hewlett-Packard (HPQ) and Dell (DELL), which will help IBM keep profits high in the long run in comparison to its competitors.

(100 character max) Cancel
91%
agree
45 votes

  Diverse Business and Global presence

IBM has a firm establishment in key emerging markets which will pay off in the future as developing nations increase their demand for technology and services.

IBM’s model is the anti-model. Whichever country the company is working in, it has a game plan exclusively catered to it. It encompasses not only the determination of the customer needs, but also the provision of every aspect of the required technology solutions – including recurring maintenance, updating and even financing.

And financing is crucial these days. IBM’s long history in the world’s markets has given the company a recognition and credibility abroad, helping to mitigate competitive threats from unproven newcomers.

Its presence in India will yield dividends as India’s economy emerges from the global financial crisis.

IBM leaders have shrewdly increased the company’s investments in the fastest growth areas of the world, increasing its unparalleled geographic diversification as it keeps emphasizing its higher-value businesses – especially software, highly profitable middleware and services.

At the beginning of 2009, 71% of IBM’s nearly 400,000 employees are working overseas – a 65% increase from two years prior.

In fact, IBM incorporates the words “global” or “world” in nearly every sentence of the business strategy outlined in its annual earnings report of 2008.

“The Internet has enabled communication and collaboration across the world and brought with it a new computing model premised on continuous global connection. In that landscape, companies can distribute work and technology anywhere in the world,” the report said.

It continues: “At the same time, the current economic crisis increases the pressure on both businesses and governments around the world to adapt…. Given these opportunities and economic challenges, IBM is working with its clients to develop new business designs and technical architectures that allow their businesses the flexibility required to compete in this new landscape.” IBM Boosts Profits with Business Overhaul

In addition to global diversification, IBM has also successfully employed a versatile and aggressive business model. Between 2000 and 2008, IBM acquired more than 100 companies and poured more than $50 billion into research and development.

In 2000, the distribution of IBM’s business model was: Hardware (24%), software (25%), financing (10%) and services (40%).

But by the end of last year, the model had evolved to: Hardware (9%), software (40%), financing (9%) and services (42%).

The result was a 130% increase in annual earnings per share (EPS) on more than 22% annual revenue growth in that span.

For 2008 – by far one of the worst years for companies around the world – IBM posted an 18.4% increase in net income and 23.9% increase in earnings per share. And IBM blew away analysts’ estimates with a fourth-quarter net income of $4.4 billion, or $3.38 a share – a 12% increase from 2007. Analysts had expected IBM to earn only $3.03 per share.

(100 character max) Cancel
100%
agree
1 votes

  Venturing into Africa

IMB will try to sell low-priced computer desktop applications to companies and governments in Africa, challenging Microsoft Corp. and other rivals in the region.

The applications include basic programs like word processing and email. They would be made available to customers via remote "cloud computing" facilities, meaning users could access the programs from the Web.

IBM is charging $10 per month per user, and can run on so-called netbook computers, or low-cost PCs priced around $300.

The IT industry in Africa is relatively small compared to Europe and the U.S., however, it is growing even in the recession. Analyst predicts it will rise 2.3% this year to $22.1 billion.

IBM aims to revolutionize the businesses in Africa. With emerging markets still developing despite recession, long IBM seems to be a good bet.

Marcus.tan.yi.wei 16:15, September 24, 2009 (PDT)

References

"IBM Markets Wares to Africa" Article from Wall Street Journal

(100 character max) Cancel
100%
agree
1 votes

  Earnings outlook retained for first quarter 2009

Tech giant IBM (IBM) retained its full-year earnings outlook, saying that service contracts are grew in January. "Recognizing that it is still early in the quarter, the company expects double-digit growth in long term signings, and growth in total signings in first quarter 2009,” IBM said in a regulatory filing, Reuters reported.

(100 character max) Cancel
100%
agree
1 votes

  TSC upgrades IBM from hold to buy

"We've upgraded IBM(IBM Quote - Cramer on IBM - Stock Picks) from hold to buy, driven by its impressive record of earnings per share growth, increase in net income, notable return on equity, expanding profit margins and relatively strong performance when compared with the S&P 500 during the past year. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

http://www.thestreet.com/story/10464984/2/tsc-ratings-updates-ibm.html

(100 character max) Cancel
100%
agree
1 votes

  New Business In Britain

IBM Corp. will provide technology services to the British financial services company Friends Provident under a $295 million contract announced yesterday.

http://www.lohud.com/article/20081211/BUSINESS01/812110402/1066/BUSINESS01

(100 character max) Cancel
0%
agree
2 votes

  Leadership in Key Obama Initiatives

IBM has been assisting the Obama administration in formulating plans for both the "smart grid" and modernizing health care data maintenance, two key priorities, and stands to be a major beneficiary.

(100 character max) Cancel
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki