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IBM Results Fail to Impress

The narrow-moat firm is still juggling legacy and growth businesses; shares are somewhat undervalued.


Andrew Lange: IBM posted an underwhelming third-quarter result as the company continued to juggle strategic and nonstrategic business lines. The company's legacy revenue and the decline there was apparent. We're particularly surprised by the decline in the cognitive solutions business. The company highlighted things like collaboration as the mainframe middleware as areas of weakness. 

On the positive side though, the global business services and global technology services businesses showed improvement. We're hopeful that digital transformation will drive revenue for the consulting and infrastructure services business lines. 

Andrew Lange does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.