Shares for International Business Machines Corp. (NYSE:IBM) rallied over 4.2 percent during Friday’s stock market trading session, heading into the weekend at $188.20 per share following the company’s most recent Earnings Report.
IBM Profit Increase
After the closing bell on Thursday, IBM reported 4Q 2011 Net Income of $5.49 billion – or $4.62 per share. That’s a modest increase of 4% over 4Q 2010 profit figures, which came in at $4.18 EPS, or $5.26 billion. The IT giant also released its 2012 guidance numbers, which came in at $14.85 per share; slightly beating analysts’ forecasts.
In IBM’s official 4Q 2011 Earnings Release, President and Chief Executive Officer Ginni Rometty stated, “We had a strong fourth-quarter performance, capping a year of record earnings per share, revenue, profit and free cash flow. We delivered outstanding results in all four of our strategic initiatives for the quarter and the year, as we continued to realize the benefit of our long-term investments in growth markets, business analytics, Smarter Planet solutions and cloud. We are well on track toward our long-term roadmap for operating earnings per share of at least $20 in 2015.”
IBM Stock Information
IBM has a 1.6 percent dividend yield of $0.75 per share with a market capitalization of $221.96 billion. The large-cap stock is a major determining factor in the performance of the Dow 30 index as well. The stock is currently near its all-time high and could be one of the Best Performing Stocks of 2012.
Below is a stock chart showing the all activity of IBM shares since they began trading more than four decades ago.
IBM’s official press release went on to state, “The company’s total gross profit margin was 49.9 percent in the 2011 fourth quarter compared with 49.0 percent in the 2010 fourth-quarter period. Total operating (non-GAAP) gross profit margin was 50.2 percent in the 2011 fourth quarter compared with 49.1 percent in the 2010 fourth-quarter period, with increases in Services and Software.”
Dow Jones Gains on IBM Earnings
Due to IBM’s weighting in the Dow Jones Industrial Average (INDEXDJX:.DJI), the index – which is comprised of 30 component stocks – gained nearly 0.8% on the day, up to 12,719 points by Friday’s 4:00pm Eastern Time closing bell. Due to the Martin Luther King, Jr. national holiday, trading opened this week on Tuesday, January 17th (see weekly stock chart for the DJIA below).
Overall, the Dow has risen 3.75% Year To Date after opening the year at 12,217 points. The overall rally in the Dow has come somewhat as a surprise to some analysts, who believe that sovereign debt issues in the Eurozone coupled with economic uncertainty here at home may cause markets to trim gains in upcoming weeks.
Whether the Federal Reserve will enact a third round of quantitative easing later this year is on the minds of many investors as they attempt to gauge how markets will perform throughout 2012. Some argue that a new round of stimulus would ease liquidity concerns throughout the United States and result in broad-based rallies, while others point out the potential inflation and loss of consumer purchasing power that can go hand-in-hand with money printing.
President Barack Obama may provide a hint on his view of current U.S. economic conditions during his State of the Union address, set for Tuesday, January 24th.
Dow Stocks and Your IRA
Putting back money for your retirement has never been easier, and the Dow Jones represents a major market indicator on how certain U.S. stocks are performing. If you’d like to consult an expert to discuss which investment strategy is best-suited for your individual needs, click on the following link to Find an Advisor in your area.