IBM's Earnings: 3 Important Takeawayshttp://www.fool.com/investing/general/2012/10/17/ibms-earnings-3-important-takeaways.aspx John Maxfield
October 17, 2012
Although neither company dazzled analysts (read about Intel's performance) and IBM's weak performance has weighed heavily on the index, the Dow is nevertheless in the midst of an earnings-season rally. It closed higher yesterday by triple digits. And while it began today in the red, it's seemingly in the midst of an ascent, down by only five points, or 0.04%, at the time of writing.
Examining IBM's earnings
Given these results, it should be no surprise that shares in the services giant are trading sharply lower today, currently down more than 5%.
In no particular order, here are three important takeaways from IBM's third-quarter earnings release.
1. Emerging-market growth
Adjusted for the currency headwinds discussed below, revenue from growth markets improved by 4%, and if you include only the four BRIC countries -- Brazil, Russia, India, and China -- that figures ratchets up to 11%. According to IBM's chief financial officer, "This quarter, 35 of the growth market countries grew at a double-digit rate, reflecting ongoing broad-based strength." By comparison, revenue from the Americas region fell on a comparable basis by 3%.
2. Currency headwinds