IBM shares fall the most in 6 months on Wednesday, first-quarter revenue falls short of expectations, adjusted profit beats

International Business Machines (IBM) overall revenue registered a sharper drop than anticipated during the first quarter, pressured by dwindling demand for the companys mainframe computers and an appreciation in the US Dollar.

IBM shares closed lower for the fifth time in the past fifteen trading sessions in New York on Wednesday. It has also been the steepest daily loss since October 17th 2018. The stock went down 4.15% ($6.03) to $139.11, after touching an intraday low at $136.58, or a price level not seen since March 8th ($135.24).

Shares of International Business Machines have risen 22.38% so far in 2019 compared with a 15.70% gain for the benchmark index, S&P 500 (SPX).

In 2018, IBM’s stock went down 25.91%, thus, it underperformed the S&P 500, which registered a 6.24% loss.

Total revenue went down 4.7% to $18.18 billion during the quarter ended on March 31st from a year earlier. In comparison, analysts on average had expected revenue of $18.46 billion.

Revenue at IBM’s cloud and cognitive segment, which encompasses analytics, cybersecurity and artificial intelligence, was reported to have dropped 1.5% year-on-year to $5.04 billion during the quarter.

Revenue at IBM’s systems segment, which includes the company’s mainframe computer business, went down 11.5% year-on-year to $1.33 billion during the latest quarter.

Meanwhile, net income attributable to shareholders shrank to $1.59 billion ($1.78 per share) during the quarter ended on March 31st from $1.68 billion ($1.81 per share) in the year-ago period.

At the same time, earnings per share, which exclude one-time items, were reported at $2.25 during the first quarter. That figure compares with a median analyst estimate of $2.22 per share.

IBM also maintained its full-year forecast for adjusted operating profit of ”at least” $13.90 per share.

According to CNN Money, the 16 analysts, offering 12-month forecasts regarding IBM’s stock price, have a median target of $145.00, with a high estimate of $173.00 and a low estimate of $115.00. The median estimate represents a 4.23% upside compared to the closing price of $139.11 on April 17th.

The same media also reported that 13 out of 20 surveyed investment analysts had rated IBM’s stock as “Hold”, while 4 – as “Buy”. On the other hand, 2 analysts had recommended selling the stock.

Weekly Pivot Levels

By using the traditional method of calculation, the weekly levels of importance for International Business Machines (IBM) are presented as follows:

Central Pivot Point – $143.54
R1 – $145.25
R2 – $146.14
R3 – $147.85
R4 – $149.55

S1 – $142.65
S2 – $140.94
S3 – $140.05
S4 – $139.15