Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Verizon and IBM Report Less Than Stellar Earnings

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Forgot to wear your Beans Boots to work yesterday? You're one cold-footed unhappy camper. (Tom Brady should have plenty of time now to sell you some Uggs.) The Dow Jones Industrial Average (DJINDICES: ^DJI  )  dropped 44 points Wednesday after poor earnings from big boys Johnson & Johnson, Verizon (NYSE: VZ  ) , and IBM (NYSE: IBM  ) . But traders were just looking to beat the snow.

1. IBM gets burned by poor server sales
It was all about IBM after big news that it's selling the servers business to China's Lenovo Group and a fourth-quarter earnings report. That's a lot of financial gigabytes for Wall Street to chew. After the Lenovo news, IBM stock fell 1%. After the earnings report, it's down another 2.6% in after-hours trading. What's happening to "Big Blue"? 

First IBM quit calculators, and then it sold its "ThinkPad" PC business to China's surging tech power Lenovo in 2005. Now Lenovo's back for more Blue. According to reports, Lenovo is bullish on the computer hardware market and is in talks to buy IBM's server business.  

The fourth quarter was the biggest revenue drop in four years, and it's all hardware's fault. IBM's sales of computer hardware to clients continues to plummet (why does Lenovo keep buying IBM's worst performing businesses?), down 27%.

Profits actually gained despite the fall in sales. But Wall Street is noticing that consumers are abandoning IBM hardware. We're all floating up into cloud data (especially in the Bay Area), and we're not even buying software; we're renting it. IBM is being outraced by technology, and it's focusing on software and services to try to catch up.

2. Verizon reports higher earnings
Can you hear me now, Verizon? The big red wireless giant Verizon released earnings Tuesday that topped analysts' expectations with wider profit margins (even though they can't even load your ESPN updates in a timely manner). The average consumer is paying 7% more than last year, and that's not bad.

So why did the stock fall more than 1%? Competition, baby. In TV land, Verizon's Fiber Optics option is seeing slowing sales to big cable deals. And in phone world, AT&T, Sprint, and T-Mobile are out to beat Goliath as well.

What's new at Verizon? It gave some details that its $135 billion deal to buy the remaining 45% of Vodafone's wireless unit closes in February. It also is paying $200 million to Intel for a TV box that would let anyone with an Internet connection watch live TV. The problem? A bunch of other companies have tried this ... with nada success.
  • Fourth-quarter earnings from Coach and eBay
As originally published on 
There's a huge difference between a good stock ...
... and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2803677, ~/Articles/ArticleHandler.aspx, 9/2/2015 8:13:34 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Market Snacks

MarketSnacks creates a single, simple, daily summary of what’s happened on Wall Street -- that you'll actually want to read.

Today's Market

updated Moments ago Sponsored by:
DOW 16,351.38 293.03 1.82%
S&P 500 1,948.86 35.01 1.83%
NASD 4,749.98 113.87 2.46%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/2/2015 4:36 PM
^DJI $16351.38 Up +293.03 +1.82%
IBM $145.05 Up +2.37 +1.66%
International Busi… CAPS Rating: ****
VZ $45.35 Up +0.45 +1.00%
Verizon Communicat… CAPS Rating: ****