GO
Loading...

Enter multiple symbols separated by commas

IBM Stock Tumbles as Results Disappoint Investors

IBM stock plunged after the company's quarterly earnings failed to beat some investors' forecasts and computer hardware sales lagged some targets.

The world's biggest computer-services company reported after the market close on Thursday a fourth-quarter profit before special items of $2.26 per share. ThinkEquity analyst Eric Ross said the results were only in line with estimates after adjusting for a tax rate that was below what analysts had expected.

"Investors were obviously dismayed by IBM's in-line EPS. We believe investors were expecting IBM to handily beat consensus estimates and, as a result, were disappointed," he said in a note to clients.

Before the results, the stock had gained 37% from a year low in July as investors raised their expectations for the company's earnings.

Several brokerages broke with the consensus of investors and increased their price targets for the company's shares.

Bear Stearns raised its target to $100 from $98. Citigroup increased its target to $115 from $105 in a report with the headline "Keep the faith."

Merrill Lynch analyst Richard Farmer said in a research report that IBM had posted "a solid December quarter." Still he maintained his "neutral" rating on the company's shares, advising clients to hold off on buying the stock.

"We prefer to wait for an entry point that reflects more investor scepticism," Farmer said.

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

U.S. Video

  • Hero miles for military members: Real estate magnate's plea

    Chairman of the Fisher House Foundation, Ken Fisher, discusses the Hero Miles program with CNBC's Dina Gusovsky. During Military Appreciation Month, Fisher is asking every traveler to donate 1,000 of their miles to replenish the Hero Miles programs that is in danger of running out.

  • Cramer shuts down this market's haters

    "Mad Money" host Jim Cramer on why this market can't stop, won't stop.

  • From the battlefield to the boardroom

    Your Grateful Nation is dedicated to helping Special Forces veterans enter the corporate world and Knot Standard provides complimentary suits to vets. Mad Money's Jim Cramer spoke with Rob Clapper, Your Grateful executive director; John Ballay, Knot Standard co-founder and president; Tej Gill, retired U.S. Navy Seal; and Darren McB, active duty U.S. Navy Seal.