Thursday 28 January 2016

IBM annual report 2015

IBM, annual, 2015, report, front page

IBM arrived with their annual report or better put with their press release concerning the fourth quarter. Sure there will probably be some changes in the "proper" annual report but I would be surprised if those changes will become enormous and therefore I make already now the summary. The share price of IBM has been dropping because they have not lived up to expectations and investors probably start to be worried if IBM will ever manage to finish the restructuring.

For the report in full please go here, for the previous summary please see IBM report Q3 2015 and to find out more regarding IBM then please click on analysis of IBM 2015 (a new one will arrive tomorrow though).

In the financial statement below we can see that everything is down, down, down and down. Oh, besides from net income everything is down. In this final statement for the year I see no difference compared to the previous report. Back then we could also see how everything was down which on one hand should be expected but on the other hand, at least according to me, I would have expected higher margins to appear at some point and I still do not see that. It should also be said that even though Q4 2015 looks much worse than Q4 2014 IBM still managed to make a better result in Q4 2015 compared to Q3 2015 because many of the "losses" decreased in size. Due to that IBM have bought back so many shares the EPS is looking good. 

IBM, 2015, financial statement

Many dislikes IBM at the moment and consider it to be an outlived dinosaur that is being managed by an equal relic but I disagree. I am still amazed that IBM manages to make such a conversion AND still bring home 13 billion USD in earnings. What additionally amazes me is that this is being done in a period when many considers IBM to have no future. I look upon this like I looked upon Intel not that long ago. You can buy a lot of future for 13 billion USD. What I find interesting is that they do not consider to have to do that which is why they instead pay a very nice dividend + have an insane share buyback program running. The only thing that annoys me with the share buyback program is that they do not retire the shares and instead they keep them in the books.

Conclusion: IBM is doing very poorly from the markets perspective and I tend to ignore the markets opinion when it comes to IBM. It was a bad year, let us not try to pretend something else, and without their "tax-evasion" skills then 2015 would not have become better than 2014. I am still confident that IBM in a couple of years from now will be looking much better than today and for this reason I will remain as a shareholder.

No comments: