The American internet service company IBM arrived with their Q2 report for 2015. This report was not well accepted by the market and I fully agree with them this time. The report was bad and what I thought was a temporary thing last quarter does not seem to have improved yet.
For the report in full please go here, for the previous summary please see IBM report Q1 2015 and to find out more regarding IBM then please click on analysis of IBM 2015.
Let us start off with the segment divided revenue to get us going into the happy mode. For the six months GTS is down by almost -11%, GBS is down by almost -13%, Software is down by -9%, Hardware is down by -38% and Other by -49%. Woow! What we see if we compare to Q1 2015 then the revenue drop has stopped and then the question is how was that then done?
In the earnings table below we see that even though they have enjoyed a much better tax rate they still end up with -11.4% on the six months earnings and this is really bad! In Q1 they had -2.4% in earnings so then I could still claim that they managed to improve their margins while dropping the revenue which kept their heads above water... this I can no longer claim. They say that part of the drop comes from currency effects so I will just have to believe them on that one but that will most likely give more troubled quarters in the near future.
Conclusion: The trouble for IBM continues and even with their massive share buy back program they have not managed to stop the fall of the EPS that happened this quarter. I kind of thought that the turnaround was already there but this will take longer and they even went out and said that the year result would be in the lower region of their forecast so we shall have no high hopes for the remaining two quarters of this year. I will remain shareholder and if the price drops far enough I should consider increasing my position.
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