IBM: Notes from conference call
- IBM mgmt notes modest sequential improvement in growth markets.
- Operating margin improved modestly while gross profit is flat; saw margin improvement in global financing, offset by declines in global business and systemes & tech.
- Notes gross margin +50 bps, pre-tax margin +70 bps, net income margin +50 bps.
- Continue to make investments in mobility, cloud.
- Continue to expect to deliver at least $20.00 of Operating EPS in 2015.
- When asked about shortfall in software relative to prior expectations, mgmt says view 90 days ago was for acceleration, and still believes they'll see software back to mid-single digit growth in 2H.
- When asked about services signings, mgmt expects improvement and says they're getting a better yield, and expects additional Q3 signings growth.
- When asked about global demand expectations for 2H; mgmt would expect Europe to see sequential improvement going forward, but it is a challenged environment...
- Would expect Japan to see improvement, saying team in Japan does quite well on top of macro; expects growth markets to see sequential improvement.
- In 2H, mgmt sees software rev growth accelerating to mid-single digit; sees STG profit stabilization.
The call has now concluded; IBM is trading -1.2% in after-hours at 190.15