Tomahawk, WI 01/23/2014 (BasicsMedia) – International Business Machines Corp. (NYSE:IBM) remains one of the world’s premier companies when it comes to Information Technology. However, in the recent years IBM has struggled to keep up with the competition in the field of IT. While it still enjoys worldwide recognition as a global brand, it is unable to keep up with the new entrants in this field, having been over-reliant on PC sales, which have dropped faster than anyone ever envisaged. The company’s sales are on a similar decline, though there is some hope that it will recover.

IBM’s Sales Better Than Estimates

When a company with IBM’s reputation struggles the way it has done, the only way for it is up. IBM has reached a stage where it has no option but to reverse all the negativity it has experienced in the recent years, and embark on a path that will lead to growth and increased profits. Recently the company published its 4Q 2013 financial results, in which its sales figures reached $27.7 billion, more than the $27.0 billion that analysts had projected. The sequential increase in sales for this period, of 17%, is better than the average of the last 6 years, 15%.

One of the reasons behind the good results posted by IBM during the fourth quarter of 2013 is the better performance in its software and systems as well as technology divisions. The backlog of services has increased by as much as 5% year on year. Currently, the services backlog within IBM is valued at $143 billion. Sales figures have grown from one quarter to the next by a massive 31%, which is again better than the increase of 25% that analysts had predicted. Software and services increased by 40% vs 34% estimates and 4% vs 3% estimates respectively.

IBM Introduces New Measures to Improve Its Financials

Going forward, the company expects its Earnings Per Share to revolve around $18.00 in 2014, which will then increase to $20.00 by 2015. If all goes well, the company should have no problem in attracting revenues to the tune of $23.1 billion during the first quarter of 2014. The company still has a long way to go to completely turn around its fortunes and change the perception of investors that it loses more money than it makes. However, based on the current financials, it seems to be on its way towards achieving what seemed impossible a few years ago.

When you compare the company’s total revenues for the fourth quarter of 2013, you will realize that the $27.7 billion was a drop of around five percent to what it posted during the same period in 2012. The shares are currently not doing as well as the company nor its investors may have wished, but there is hope. If it can find ways of making up for the losses it experiences with dropping PC sales, it should be able to reduce the deficit and make more money. The board has agreed that everyone will forego any personal incentive for 2013, which they receive annually.

However, I would still recommend IBM as a buy in 2014, despite all the challenges it has faced up to this moment.

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