Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK ( TheStreet) -- International Business Machines (NYSE: IBM) has been reiterated by TheStreet Ratings as a buy with a ratings score of B. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, notable return on equity and increase in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
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- INTL BUSINESS MACHINES CORP has improved earnings per share by 10.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, INTL BUSINESS MACHINES CORP increased its bottom line by earning $14.41 versus $13.12 in the prior year. This year, the market expects an improvement in earnings ($16.90 versus $14.41).
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the IT Services industry and the overall market, INTL BUSINESS MACHINES CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Despite the weak revenue results, IBM has outperformed against the industry average of 19.9%. Since the same quarter one year prior, revenues slightly dropped by 4.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the IT Services industry average. The net income increased by 5.7% when compared to the same quarter one year prior, going from $3,823.00 million to $4,041.00 million.
- Net operating cash flow has decreased to $3,760.00 million or 16.70% when compared to the same quarter last year. Despite a decrease in cash flow of 16.70%, INTL BUSINESS MACHINES CORP is in line with the industry average cash flow growth rate of -17.64%.
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