Is IBM Stock a Buy?
International Business Machines (NYSE: IBM) had revealed preliminary third-quarter revenue and earnings when it announced the spinoff of its managed infrastructure services business on Oct. 8. Thus, the quarterly results announced this week didn't bring any surprise. But management shed some more light on Big Blue's near-term weak performance and long-term growth plans. Given those important clarifications, is IBM stock a buy?
As analysts expected, IBM's third-quarter revenue dropped 2.6% year over year (or 3.1% adjusting for divested businesses and currency) to $17.6 billion -- the third consecutive quarter of revenue decline.
During the earnings call, management explained that second-quarter headwinds persisted during Q3: Some customers, especially in the retail, airline, and hospitality industries, paused their investments to prioritize operational stability and face the coronavirus-induced uncertainties. More importantly, these short-term challenges don't seem to correspond to a secular decline in demand for IBM's solutions and services, according to CFO Jim Kavanaugh.
Source Fool.com
