Updated from 12:31 p.m. ET to reflect IBM's third-quarter report, after-hours actionARMONK, New York. ( TheStreet) -- IBM ( IBM) has become an attractive prospect for investors looking for certainty in a fickle economy. Although not a glitzy gadget maker in the style of Apple ( AAPL) or a funky Internet stock a la Google ( GOOG), IBM's vast software and services divisions offer consistently stable revenue streams, helping insulate the firm against economic unease.
|IBM reports its third-quarter results after market close.|
"IBM's history of divesting commoditizing businesses and strengthening its position through focused organic investments and acquisitions in higher-value segments have positioned it well," noted Macquarie's Zelnick. IBM CFO Mark Loughridge said Monday in prepared remarks for the company's conference call that IBM was lifting its operating earnings per share outlook for 2011 to at least $13.35, an increase of 10 cents from its previous view. He called this a "good start toward our 2015 roadmap," which is a projection for operating earnings per share to reach at least $20 by 2015. The company has also said it expects growth markets to account for 30% of its total revenue by that time. The after-hours decline in the stock aside, IBM still seems to firing on all cylinders, and this initial reaction may have more to do with taking some profits in a nervous market given the stock's year-to-date gain of more than 25%. The shares have a forward annual dividend yield of 1.6%, and a reasonable forward price-to-earnings multiple of 12.7X, so they won't be able to pull back too far before starting to look at attractive. The revenue miss is slight but it's likely being viewed through the context of IBM delivering upside of 2.5% and 5.2% on the top line in the first two quarters of fiscal 2011. -- Written by James Rogers in New York. >To follow the writer on Twitter, go to http://twitter.com/jamesjrogers. >To submit a news tip, send an email to: firstname.lastname@example.org