It was not a great second quarter for computing legend IBM (NYSE:IBM). It wasn’t, however, a terrible quarter either. The results were quite soundly mixed, and for investors, a wink was as good as a smile as IBM gained over 3% at one point in Thursday afternoon’s trading.
The pre-market did not start off well for IBM, but investors quickly turned the other cheek and started a run-up that lasted well into the afternoon for IBM. IBM posted a pretty impressive win on earnings, coming in at $2.18 per share, which handily beat estimates calling for $1.42 per share. However, IBM posted a narrow miss on revenue, which came in at $15.5 billion against estimates that were looking for $15.57 billion. Revenue was down just 0.3% against the same time the previous year, but several of IBM’s various sectors posted improvement. Its big loser was infrastructure revenue.
Basically, as noted by Morgan Stanley’s Erik Woodring, IBM’s mixed quarter really doesn’t change the story much. IBM is still posting solid results, and improving transaction processing measures, which is just what IBM bulls were looking for. Meanwhile, IBM bears are convinced the company is a few missteps from disaster, noting that overly-optimistic revenue growth in the second half is a serious concern. That leaves Woodring between the two extremes, noting that IBM’s projections are pretty optimistic, but its competitive position overall is actually getting better, particularly when compared to other firms in the market.
Analysts who aren’t Woodring, however, are a bit more split. With three Buy ratings, six Hold and one Sell, IBM is currently rated a Hold by analyst consensus. Plus, IBM stock offers its investors a slight 2.9% upside potential thanks to its average price target of $143.11.