Tags: Cuban | IBM | financial | earnings

Mark Cuban: IBM 'Specializes in Financial Engineering' and 'Has No Vision'

By    |   Wednesday, 22 October 2014 02:53 PM

Billionaire investor Mark Cuban was none too impressed with IBM following the weak third-quarter earnings report it issued Monday.

Adjusted earnings from continuing operations totaled $3.68 a share last quarter, down from $4.08 a year earlier. Revenue slid 4 percent to $22.4 billion, the 10th consecutive decline.

Many analysts are disappointed with IBM's inability to monetize cloud computing services more robustly and with the decline of IBM's traditional hardware and software services.

Revenue from cloud services ran at an annual rate of $3.1 billion in the third quarter. While that's an 11 percent increase from the second quarter, it's chump change compared to IBM’s total revenue of $100 billion last year.

"They have no vision," Cuban tells CNBC. "What they've evolved into is a company that does [arbitrage] on acquisitions. It's stock buybacks. Who is IBM anymore? They specialize in financial engineering. To me, that's not a future."

IBM responded in an email to CNBC: "When it comes to investing in the business and returning money to shareholders, IBM has done both."

Morningstar analyst Peter Wahlstrom offers a mixed assessment of the company.

"We are encouraged that IBM continues to shed noncore, low-margin businesses to boost longer-term performance," he writes on Morningstar. "But we think it continues to face a number of near- and intermediate-term headwinds in its remaining segments that have led us to temper our growth forecasts."

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Billionaire investor Mark Cuban was none too impressed with IBM following the weak third-quarter earnings report it issued Monday.
Cuban, IBM, financial, earnings
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2014-53-22
Wednesday, 22 October 2014 02:53 PM
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