Cantor Fitzgerald: Ignoring FX Impact, IBM's Sales Are Up Over January
International Business Machines Corp. (NYSE: IBM) reported mixed first-quarter earnings on Monday post the market closing.
EPS for the company grew 9 percent year-over-year to $2.91, while revenue remained nearly flat at $19.6 billion.
Brian White from Cantor Fitzgerald was on CNBC Tuesday to weigh in on IBM's results.
"I think it was a very good quarter," White said. "If you look at EPS, they gave an EPS upside in the quarter, margins expanded year-over-year and, in constant currency, sales were flat.
"So, I think if you back down the FX impact relative to January when they reported last, sales actually showed a little bit of upside versus the Street."
Cloud: Very Strong
On the company's free cash flow guidance, White said, "I think nothing has changed in terms of free cash flow guidance for the year; so, that's unchanged. So, I think when you look at a company that's going through a major transition to the cloud."
He continued, "Some of that is shifting software and services from traditional areas to more of cloud areas. So, the traditional areas are looking a little softer in the cloud, which was up 75 percent year-over-year. It was actually very strong."
White was asked about the recent performance of IBM versus previous years. He replied, "When I look at IBM, we have had a couple of decent quarters [...] The stock rallied into last night's print, but we have had three years of underperformance versus the S&P.
"And in fact, we have underperformed the S&P by 77 percent since the end of 2011. And the last two years it's been the worst performer in the Dow," White concluded.
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