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Why Wasn't Street Stoked By IBM Earnings?

Shares of IBM were volatile in extended trade after big blue reported slightly higher-than-expected earnings for the first quarter of 2011, however investors were slightly concerned about margins.

Gross margin climbed to 44.1% from 43.6%, as margins improved across nearly all business segments, however the Street may have hoped for more.

”And new signings declined,” adds Joe Terranova. “I think investors wanted to see an acceleration in signings.”

On the positive side, IBM raised its full-year profit forecast buoyed by growth in the company’s software and mainframe businesses.

IBM also raised its forecast for full-year profit, excluding items, to at least $13.15 from its previous view of at least $13.00.

By the numbers, company reported first-quarter profit, excluding items, of $2.41 per share, ahead of the average analyst forecast of $2.30, according to Thomson Reuters I/B/E/S.

Revenue rose 8 percent from a year earlier to $24.6 billion, beating the average analyst forecast of $24.0 billion.

What’s the trade?

Guy Adami thinks any dip in IBM is a buying opportunity.

Trader Tim Seymour thinks tech is under pressure broadly and as a result he doesn’t suggest jumping into IBM right now.

Karen Finerman sides with Seymour. She thinks the stock is fully valued at current levels. “I wouldn’t jump in right here,” she says.








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Trader disclosure: On April 12, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Karabell owns (AAPL); Karabell owns (BIDU); Karabell owns (GOOG); Karabell owns (MRVL); Karabell owns (SINA); Finerman and Finerman's Firm own (AAPL); Finerman and Finerman's Firm own (BP); Finerman owns (C); Finerman and Finerman's Firm own (CVS); Finerman's Firm owns (HPQ); Finerman's Firm is short (IBM) calls; Finerman's Firm owns (JPM), is long (JPM) leaps; Finerman owns (JPM); Finerman and Finerman's firm owns (MSFT); Finerman's firm owns (TGT); Finerman owns (UNG); Finreman owns (USO); Finerman's Firm is short (IWM), (MDY), (SPY); Finerman's Firm is long S&P 500 puts; Finermna's Firm is long Russell 200 Puts; Terranova Owns (VRTS); Terranova Owns (JPM); Terranova Owns (V); Terranova Owns (BX); Terranova Owns (UPL); Terranova Owns (HOC); Terranova Owns (TCK); Terranova Owns (BAX); Terranova Owns (OXY); Terranova Owns (XOM); Terranova Owns (AKAM);

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