Investors sell off IBM despite 12% gain
October 19, 2010
Investors sold off IBM’s stock Monday after the company once again reported a fall in new contracts as research firm Gartner forecast “timid” growth in corporate IT spending.
IBM’s NYSE share price fell 3.31% in after-hours trade after it reported a 7% decline in contract signings in its key services group, Bloomberg said.
Big Blue had reported an otherwise healthy result, with quarterly income up 12% and sales 3% higher.
“In the third quarter we grew revenue in our hardware, software and services businesses, expanded margins and again increased earnings per share at double digits,” said CEO Sam Palmisano, pointing to 29% revenue growth in BRIC markets.
However, investors were wary of the fall in new services contract, totaling $11.0 billion for the quarter.
“Investors are likely to key in on IT-services signings being a bit below expectations,” Andy Miedler, an analyst at Edward Jones & Co.,told Bloomberg. “It’s a key measure of deal activity.”
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