Shares of business-class computing giant IBM
Non-GAAP earnings jumped 15% year over year to $2.78 per share as revenue stayed flat at $24.7 billion. That's 4.5% ahead of Wall Street's earnings expectations and a rounding error away from meeting the consensus revenue target. Management also raised the official earnings target for the full year to $15 per share, just ahead of the Street consensus at $14.93 and up from the previous guidance of $14.85.
So Big Blue delivered on my vision of beating earnings targets once again. GAAP gross margins expanded to 45.1%, and the net margin also jumped. What's more, the company improved significantly on its one glaring weakness, as free cash flows soared 140% to $1.9 billion.
In short, there's absolutely nothing wrong with these results. IBM investors may have gotten a wee bit ahead of themselves in the buildup to this report, as the stock has beaten both the market and major rivals since the last quarterly checkup:
That's despite Oracle's
IBM didn't use the "Big Data" catch phrase in this report, but you can bet that it's being discussed on the analyst call. Read up on the macro trend that drives certain software builders to a new golden age in this special report, but get your copy right away, because it won't be 100% free much longer.
Fool contributor Anders Bylund holds no position in any of the companies mentioned. Check out Anders' holdings and bio, or follow him on Twitter and Google+. The Motley Fool owns shares of Oracle, IBM, and Microsoft. Motley Fool newsletter services have recommended buying shares of Microsoft and creating a bull call spread position in Microsoft. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
More from The Motley Fool
This Dow Component Forged a Blockchain Joint Venture With This Global Logistics Giant
Though late to the party on cloud computing, this Dow stock is on the leading edge of blockchain development.
What to Expect When IBM Reports Earnings
The end of Big Blue's infamous streak of slumping sales is near.
IBM Gets a Pre-Earnings Boost
Big blockchain news and an analyst upgrade have shares riding high going into Thursday's crucial report.