My favourite major transforming company IBM arrived with their quarter report. Several quarters in a row they have reported decreased revenue and happily, often also, increased margins. This report is no different. Besides from this the report looks as if it has been printed on one of those old terminals that were extremely loud while printing. Low tech can be oh so efficient and if it works why not keep it and use it?
Please go here for the report in full and to see my previous summary then you should click on IBM annual report 2014 and to find out more about the wonderful company IBM please go to analysis of IBM 2015.
I must only say that I saw an interview of Virginia Rometty by Charlie Rose and I like her very much. She is doing an excellent job and from my point of view as a shareholder she will remain doing so for as long as she wants. I like consistence and I like CEOs that are truly married to the companies.
Taking a look at the financial statement then that has not been a happy experience since even longer before I decided to step in as a shareholder in IBM. This giant is moving slower that a fully filled oil tanker but Rometty is turning the ship around! Still... every segment shows decreased revenue. Happily we also see here that the costs are decreasing so at least that is something and even more important the margin is improving and is up at 48.2%!
Why if there is such a massive drop in the revenue am I a shareholder in IBM? It all comes below because even when they take a whopping -12% in revenue they have only ended up with -2.4% in net income and due to the share buyback programs we shareholders even end up with +2.6% per share.
Conclusion: IBM keep impressing me and it was correct to step in as shareholder. Rometty is doing a great job even though her acquisition rate is a bit scare to me... I think she said that they had bought and integrated around 170 tech companies all the while divesting their production units to be able to go pure service. IBM is a long term commitment and I see no reason to sell my shares.
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