International Business Machines Corp.’s (NYSE:IBM) beat as it reported its earnings was a beat but it wasn’t a particularly strong one, Sherri Scribner said in a recent interview on CNBC.
Reacting to the most recent International Business Machines Corp. (NYSE:IBM) report, Scribner, Deutsche Bank research analyst, said:
“If you look at the head line, the services business is a little weaker than expected. The software business is weaker. The beat really came on the hardware side where the company did better [in the]mainframe business this quarter. But the key segments, the services and the software segments, were weaker than IBM would have wanted. The EPS also was helped a little bit by buy backs. So, the beat was a beat but it was not strong that strong of a beat.”
Asked about Stanley Druckenmiller who is short on International Business Machines Corp. (NYSE:IBM), Scribner stressed that Deutsche bank has a Hold rating on the stock. She said:
“Well, we have a hold on the stock. I think there’s a lot of headwinds for the company going forward. If you think about their traditional IT hardware business, the services and the software business, those are really under pressure from the cloud at this point so there’s a lot of secular headwinds for IBM right now. The revenue line is not growing for them. They’ve been declining for the past couple of years. So there’s a number of headwinds. It’s hard to get really excited about the name, even though it really is an inexpensive stock at this point training at about ten times forward earnings.”
Watch the video below where Scribner talked about what and who is threatening International Business Machines Corp. (NYSE:IBM) at the moment.
International Business Machines Corp. (NYSE:IBM) shareholders includes Cliff Asness’ Aqr Capital Management which reported 599,237 shares in the company by the end of the first quarter of the year. Patrik Brummer’s Zenit Asset Management Ab also reported 225,000 shares by the end of the first quarter.