IBM Revenue Hurts on Weak Demand, Morgan Stanley Profit Jump on Trading

Mukesh Buch
19 Apr, 2017
New York City

Abbott net surged. BlackRock profit jumped 31% on index funds business. IBM net declined 10% on 3% drop in revenues on weak hardware demand. Lithia Motors net surged. Morgan Stanley net soared. U.S. Bancorp net jumped 4%. Yahoo net swung to profit.

[R]2:10 PM New York – Abbott net surged. BlackRock profit jumped 31% on index funds business. IBM net declined 10% on 3% drop in revenues on weak hardware demand. Lithia Motors net surged. Morgan Stanley net soared. U.S. Bancorp net jumped 4%. Yahoo net swung to profit.[/R]

Tollbooth Index jumped 72.83 or 0.6% to 11,677.68.

Earnings Review

Abbott Laboratories ((ABT)) slid 5 cents to $43.38 after the healthcare products maker said sales in the first-quarter ending in March jumped 29.7% from a year ago to $6.3 billion.

Net income in the quarter surged 32.5% to $419 million or 24 cents per diluted share from $316 million or 21 cents in the same quarter last year.

""The integration of St. Jude is going well and recently launched products are contributing to double-digit sales growth across several areas of our Medical Devices business,"" said chairman and chief executive officer Miles D. White.

Abbott reaffirmed earnings per share in the fiscal 2017 between 92 cents and $1.02.

BlackRock, Inc ((BLK)) slipped 1.2% or $4.70 to $378.92 after the asset and investment manager reported revenues in the first-quarter ending in March advanced 8% from a year ago to $2.8 billion.

Net income in the quarter jumped 31% to $862 million or $5.23 per diluted share from $657 million or $3.92 in the same quarter last year.

Net investment in fixed-income securities totaled $33.37 billion and iShares exchange-traded funds business surged to $64.48 billion in new money from $24.25 billion in a year earlier.

“Retail business returned to positive organic growth generating long-term net inflows of $5 billion,” chairman and chief executive officer Laurence D. Fink said.

Fink added “First quarter long-term net inflows of $80 billion, representing annualized organic asset growth of 7%.”

International Business Machines Corp ((IBM)) declined 5.2% or $8.83 to $161.25 after the information technology services provider reported total revenues in the first-quarter ending in March fell 2.7% to $18.2 billion.

Net income in the quarter declined 10% to $1.8 billion or $1.85 compared to $2 billion or $2.09 per diluted share in the same period a year ago.

IBM said strategic imperatives revenue jumped 13% to $7.8 billion and cloud revenue advanced 33% to $3.5 billion and revenue in the technology services and cloud platforms business slumped 2.5% to $8.2 billion.

IBM added revenues declined mainly due to weak demand in its IT business and demand in hardware and software businesses were nearly flat.

""We''re taking time to make sure we invest in the right places and make sure we get the kind of margin high-value profile we''re looking for,"" said chief financial officer Martin Schroeter.

IBM forecasted fiscal 2017 earnings per share of about $13.80.

Lithia Motors Inc ((LAD)) surged 10.6% or $8.86 to $92.80 after the new and used vehicles retailer stated revenues in the first-quarter ending in March advanced 13% from a year ago to $2.2 billion.

Total same store sales in the quarter increased 3% and used vehicle retail same store sales jumped 6% while service, body and parts same store sales soared 8%.

Net income in the quarter surged 25.8% to $50.7 million or $2.01 per diluted share from $40.3 million or $1.55 in the same quarter last year.

Lithia’s total retail sales soared 10% and on a same-store basis new-vehicle retail sales fell 1.4% to 32,215 units and used-vehicle retail sales rose 4.3% to 28,501 units.

Lithia forecasted fiscal 2017 revenues between $9.2 billion and $9.4 billion and new vehicle same store sales to grow 1.5% and used vehicle same store sales to jump 5.5% and diluted earnings per share in the range of $8.05 to $8.35.

Morgan Stanley ((MS)) gained 2.5% or $1.04 to $42.25 after the investment bank and brokerage services provider said revenues in the first-quarter ending in March surged 24.4% from a year ago to $9.7 billion.

Net income in the quarter soared 72.7% to $1.9 billion or $1 per diluted share from $1.1 billion or 55 cents in the same quarter last year.

Wealth management that contributed 41.6% investment bank’s net revenue jumped $4.1 billion from the same period a year ago.

Total client assets in the quarter were $2.2 trillion and client assets in fee-based accounts were $927 billion at quarter end. Fee-based asset flows for the quarter were $18.8 billion.

However, the brokerage services provider said compensation expense increased to $4.5 billion from $3.7 billion a year ago driven by higher revenues.

U.S. Bancorp ((USB)) increased 28 cents to $50.08 after the banking and financial services provider reported total revenues in the first-quarter ending in March soared 5.7% from a year ago to $5.3 billion.

Net income in the quarter jumped 4.4% to $1.4 billion or 82 cents per diluted share from $1.3 billion or 76 cents in the same quarter last year.

The bank said nonperforming assets in the quarter declined 13% to $1.5 billion from a year ago period.

Yahoo! Inc ((YHOO)) rose 19 cents to $47.75 after the search engine services provider said revenues in the first-quarter ending in March jumped 18.2% from a year ago to $1.3 billion.

Net in the quarter swung to profit $99 million or 10 cents per diluted share from a loss of $99 million or 10 cents in the same quarter last year.

Yahoo said mobile revenues in the quarter surged 58% to $412 million and desktop revenue jumped 11% to $859 million and search revenue soared 51% to $745 million from the same period a year ago.

Yahoo added revenue in Mavens - the mobile, video, native and social advertising units advanced 35.6% to $529 million.

“We committed to finishing strong and planning for the best possible integration with Verizon which is anticipated to complete in June,"" said chief executive officer Marissa Mayer.