No matter what the earnings are, trust me when I say they are low quality earnings. I work in sales and we're pulling deals forward by giving extreme, extreme discounts. We're mortgaging our future to meet our quarterly goals. Our pipeline for Q3 and beyond is getting completely eviscerated. Most of the deals are mainframes but how much more will they need once they refresh it in H1 2021? The next few years are going to start to reveal that GR and AK sold our future earnings at a steep discount to get it today. To think that we won't face the consequences on this is delusional.
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"...accounting gimmicks..."
Would seen that accounting industry needs to be fixed. The industry should be making things clearer... not applying layers of smoke and mirrors.
"...... GAAP EPS of $1.47, a 3% drop Y/Y...."
This is the key no one is talking about. 3% DROP from an already bad Covid year. That's real bad. This is the news stats that needs to go around. The real number that tells the story.
Excellent analysis from ZeroHedge on IBM's "usual accounting gimmicks" in today's earnings announcement:
https://www.zerohedge.com/markets/ibm-reports-best-revenue-growth-3-years-usual-accounting-gimmicks-remain
"As for the not so good news, there was plenty starting with the observations that IBM's accounting gimmicks were back front and center, starting with the company's effective tax rate, which in Q2 was a paltry 14.7%. And while an increase from last year's 13.3%, it was largely distorted by the -5.6% tax rate in Q1.
Elsewhere, it has long been known that only Watson can calculate IBM's "one-time non-recurring" charges, which are neither one-time nor non-recurring, which meant that the adjusted EPS of $2.33 (which rose 7% Y/Y) was actually GAAP EPS of $1.47, a 3% drop Y/Y."
Yikes...the GAAP person commenting on Layoff thread at 7pm. He must know a ton.
Since someone on here asked for the compare between Q2 2021 and Q2 2019 (not the easier layup compare to Q2 2020). Here it is ... direct ibm.com/investor .. using GAAP (and not that phony-baloney "Non-GAAP" garbage)
Q2 2021 EPS = $1.47 ; Q2 2019 EPS = $2.81
Wow, really impressive IBM! Keep up the good work!
@1aso+1bT5yGRe...hmmm? When u don’t know sh-t. Just like most people on here.
@1aso+1bT5yGRe...stock price
"IBM will be valued at $176 in the next year."... I'm assuming you mean Market Capital as opposed to the stock price.
IBM will be valued at $176 in the next year.
General Electric had the same practice. I believe it involved maintenance contracts for power equipment. GE would "disturb" the existing multi year contract mid term, pay out the old one and write a new one at a deep discount for another term.
See: https://www.scribd.com/document/426430260/GE-Powered-the-American-Century-Then-It-Burned-Out-WSJ-5702458693311314392-pdf-1-pdf
The business would record new revenue, everybody looked like a hero, got paid their bonuses and commissions and, most importantly, reported the numbers to the market.
Earnings forecasts were exceed, shareholders received their dividends, the share price was buoyed and executives' options were in the money. But eventually it blows up, people realize that the emperor is in fact bare-a$$ed and the whole thing has been a mirage.
But none of this really matters because for a good long time a lot of people made a ton of money from the house of mirrors and passed the problem on to the next generation.
GE is toast now.
How does Storage look? Business as usual for storage is quarter over quarter decline, and I would be surprised by any change there.
So we are getting rid of sales but we're spending on those stupid and vague ads during nfl and nba games?
Does it matter? We’re getting rid of sales by year end I thought.
If it's get me another one year to retirement I don't care what they do or what happens to IBM
Maybe AK needs to show there's no impact of Jim leaving on ibm and wants to show revenue increase
The pull forward strategy is setting client expectations on price lower and lower. Our margins on our only real product, mainframes, is getting tighter. You’d be shocked at how low our mainframe prices are getting. Disaster in the naming.
IBM has always had this business model “pull it forward” They adopted it when they transitioned from a rental business model to a purchase business model over 30years ago. Once you pass the transition phase (3-5 years), the pull it forward strategy is just business as normal. Trust me it’s been part of the plan for the past 30 years, and everything you are saying and thinking we’re the same things we were saying and thinking. The bean counters have already baked it into the business model, and it’s just standard operating procedure
At some point, the music will stop. It will be ugly. Get out while you still can.