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IBM Continued Its No-Revenue Growth Trend in 4Q15


Jan. 20 2016, Updated 4:17 p.m. ET

IBM failed to report revenue growth but exceeded analysts’ expectations

As scheduled, IBM (IBM) reported its fiscal 4Q15 and 2015 results on January 19, 2016. Soon, we’ll see IBM’s peers in the technology space Citrix (CTXS), SanDisk (SNDK), and Microsoft (MSFT) announce their fiscal results as well.

IBM reported revenues of $22.1 billion and non-GAAP (generally accepted accounting principles) EPS (earnings per share) of $4.84 in fiscal 4Q15. For fiscal 2015, IBM reported revenues of $81.7 billion and non-GAAP EPS of $14.92.

Though IBM failed to report any revenue growth, its fiscal 4Q15 results beat analysts’ expectations. IBM’s revenue and EPS of $22.1 billion and $4.84, respectively, beat analysts’ expectations by $20 million and $0.03 cents per share, respectively.

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Fiscal 4Q15 marked the 15th quarter of no revenue growth for IBM

In our IBM 3Q15 earnings series, we stated that its 3Q15 results marked 14 straight quarters of falling revenue. In our IBM 4Q15 pre-earnings series, we also stated that this trend is likely to continue in fiscal 4Q15.

IBM’s fiscal 4Q15 results marked 15 straight quarters of falling revenue for the company. On a year-over-year basis in fiscal 4Q15, IBM’s revenue and EPS fell by 8.5% and 14%, respectively.

All of IBM’s operating segments posted revenue falls in 4Q15

The chart above shows the revenue contributions of each of IBM’s operating segments in 4Q15. All of IBM’s operating segments reported revenue falls in fiscal 4Q15, just as they did in 3Q15.

Investors who wish to gain broad-based exposure to IBM can consider investing in the iShares US Technology ETF (IYW). IYW has an exposure of 46.7% to application software and invests ~12.5% of its holdings in IBM.


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