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IBM shares stumble after sales fall short

IBM shares stumble after sales fall short

IBM Corp. shares slid in late trading Monday after sales fell short of estimates and it gave a disappointing outlook for the year. The computing services company said operating earnings fell 9% from a year ago to $3.34 a share,  four cents better than the Wall Street consensus had expected.1397746719000-IBMGTY-52783368-63630884

Revenue came in at $19.3 billion, down 14% as reported, and short of the $19.6 billion forecast by analysts. Sales would have slid 1% if the impact of the divested System x business and currency changes were stripped out, it said. The company, like many of the big names in the tech field, is trying to find its way forward in a rapidly changing world, not only with the evolution of information technology but with the complications of global currency moves that work against American exporters like IBM.

Back in July, based on rates then,  the company said it expected currency to impact revenue growth by approximately 8 to 9 percentage points for the third quarter of 2015.  IBM said it still expects a 4-point impact to revenue growth in each of the first three quarters of 2015 due to the divestiture of the System x business in October 2014. Those two factors were estimated to impact, negatively, full-year earnings by about $0.80.

In trading Monday, ended before IBM’s IBM report, shares were down $1.17 to close at $149.22. They were down 5% after hours. IBM said it expects to earn between $14.75 and $15.75 a share in non-GAAP earnings. Analysts polled by Thomson Financial forecast $14.99 to $15.87 a share, on average.


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