Despite an improvement in profits, IBM reduces its income.

January 22, 2021 14:00

During yesterday’s trading day, the technology giant International Business Machines, better known as IBM, announced its earnings for the fourth quarter of 2020. And despite their earnings exceeding analysts' forecasts, revenue was below expectations.

Earnings per share settled at $2.07 versus the expected $1.81, while revenue amounted to 20,370 million dollars below the market consensus of 20,640 million dollars.

In recent years, this company has been making an effort to renew its business model, betting on a combination of software development and cloud services. This process led IBM to purchase Red Hat for a value of $34 billion, which has experienced a 10% growth in revenue.

Despite the fact that the price rose 1.21% yesterday, closing at 131.91 dollars per share, the price is undergoing strong corrections of up to 7%. The company's future prospects may, however, remain positive due to the changes made in recent years and its low debt.

Technically speaking, during the last months, this company has been moving within a bullish channel that has been reinforced by the triple crossing of ascending averages that has occurred during this movement, although we can observe a bearish divergence with its oscillators.

In the short term, it is important to see if the price is able to maintain the low band of the channel that acts as its main support since if it maintains it, the price could continue its way until reaching its resistance zone in green.

Source: Admiral Markets MetaTrader 5. IBM daily chart. Data range: from September 25, 2019 to January 22, 2021. Prepared on January 22, 2021 at 12:00 CET. Keep in mind that past returns do not guarantee future returns.

Price evolution of the last 5 years:

  • 2020: -6.09%
  • 2019: 17.92%
  • 2018: -25.91%
  • 2017: -7.57%
  • 2016: 20.61%

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