Kaltbaum Says Buybacks Are Behind EPS Growth At IBM
International Business Machines Corp. (NYSE: IBM)'s recent quarterly-earnings growth of 2 percent per share was driven solely with buybacks, Gary Kaltbaum of Kaltbaum Capital Managment told Benzinga.
"My biggest issue is their accounting and how they engineer around it," Kaltbaum said, noting that IBM's revenue has declined in each of the past 12 quarters.
On Tuesday, IBM posted EPS growth of 2 percent on a 12 percent decline in revenue to $19.6 billion.
Earnings growth is derived from "major buybacks, lower tax rates, all kinds of things they do each quarter," Kaltbaum said. "It's just very weak stuff in comparison to the market.
"The only good news about IBM is that around $155, $160 a share, they've been getting pretty darn good support over the last six months," Kaltbaum said.
IBM traded recently at $164.21, down $1.95. Since November, the shares are off about 0.6 percent.
"One gets to wonder," Kaltbaum said, "if it's so weak in a strong market, if we ever do get into a bear market again, what probably leads the market down? I think it's going to be a stock like IBM."
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|Oct 2016||Goldman Sachs||Maintains||Neutral|
|Oct 2016||Credit Suisse||Maintains||Underperform|
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