IBM ($NYSE:IBM) stock is in the black, but shareholders are seeing red - and they're happy. Let's get into it.
The New York tech conglomerate's $34 billion Red Hat acquisition is being billed as a massive success - revenues soared just months after IBM's deal to buy the software company out. Plus, earnings and revenue topped analysts' expectations, and best of all, investors were pleased to see IBM increase forward-looking guidance. After seeing shares underperform the market for years, IBM is finally looking up.
"We’re off to a great start with Red Hat, with solid revenue trajectory and expanding client base, both good indicators of our clients’ confidence in the value of IBM and Red Hat together," IBM CFO Jim Kavanaugh said on the company's earnings call Tuesday, January 21.
At IBM, job postings peaked a couple of months after its Red Hat deal wrapped up, and then precipitously fell from about 9,300 to 6,300. The 32% fall to a little more than 6,300 job openings is the lowest tally we've recorded in more than a year at IBM.
In China, IBM was also reducing job openings - but taken in contrast to its global job postings chart, it's difficult to make the argument that 2019's cutback was driven by the trade war (and analysts weren't as bearish on IBM thanks to the spat between Presidents Donald Trump and Xi Jinping, as they were other tech companies). Job postings in China have trended downward for months, but to begin 2020, they shot up about 30%, to 360.
In the second half of 2019, and now to begin 2020, it appears to be a growing trend that many of the leading technology, machinery and consumer companies in the United States are turning a deaf ear to the Trade War narrative and returning to business as usual.
The factor that executives have to balance in their plans - and that investors have to calibrate their risk appetite for - is whether the oft-discussed 'Phase 2' of the Trump-Xi deal is approved, or whether American companies will have to brace for another leg down in the policy beef.
About the Data:
Thinknum tracks companies using the information they post online - jobs, social and web traffic, product sales and app ratings - and creates data sets that measure factors like hiring, revenue and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.