IBM’s Q3 2013 Revenue Miss May Offer You a Profitable Bargain

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It is no longer news that International Business Machine (IBM) released disappointing 2013 third quarter results. It is also no longer news that the stock has taken a beating since then from $186.73 per share it traded at the close of business just before the third quarter financials were released to the investing public on Wednesday, Oct. 16. The negative reactions of investors to the third quarter results were noticed during the extended hours of trading on that same day when the stock took a dip from $186.73 to $175.99 per share. That sudden dip in IBM's stock price amounts to a loss of about 6% per share within a space of a few hours after the release of the third quarter results.

Really, IBM needs no introduction to a large number of the investing public because it is renowned as one of the blue chip companies with the best stock rating many love to own. In the last decade, IBM maintained a good rating as the only tech company that offered consistent yearly dividend increases. IBM is a tech company that has survived three eras of computing technology transitions. In the last two decades, the company has transitioned from the mainframe era to the PC era and now to the era of mobile computing technology where it is taking a foothold in the software and services line of business and declining its operations from being a pure hardware producing company.

In this article, I would try as much as I could to show to the investing public that IBM isn't such a disappointing company as many investors have come to believe even with its 2013 third quarter results that missed revenue target.

IBM's 2013 Third Quarter Results at a Glance

In the first instance, IBM's net income for the quarter rose by 6% to $4 billion. Also, the company's earnings per share (EPS) of $3.99 for the quarter exceeded consensus' estimate by 4 cents. Looking ! at the returns of IBM for the quarter under review, the revenues from two segments of the company [size=11.0pt;line-height:115%; font-family:"Calibri","sans-serif";mso-ascii-theme-font:minor-latin;mso-fareast-font-family: Calibri;mso-fareast-theme-font:minor-latin;mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman";mso-bidi-theme-font:minor-bidi; mso-ansi-language:EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA">— —