Active Software Stocks: Microsoft & IBM perform well

Systems Software WAN Optimization

Here in this article, we take a lot at two very promising stocks: Microsoft and IBM. Both these stocks have been related with some strong news and therefore the stock prices of these two stocks has risen in the past couple of weeks. Let’s take a closer look.

Microsoft, the software giant well known for its Windows operating system and Office productivity suites, announced that it will lay off up to 18,000 of its 127,104 employees. Approximately 12,500 of these positions will be from the software giant’s freshly acquired Nokia handset division. Investors were pleased with this announcement, driving shares up by as much as 3.7% during Thursday’s trading session (and up 6.1% for the week).

Technology giant IBM reported its earnings results after the close of the day. Revenue came in at $24.36 billion, edging out analyst consensus by $230 million. Earnings per share was $4.32, beating consensus by $0.03. Full-year earnings per share of at least $18 was reiterated, pushing past the $17.87 consensus.

Software Stocks: Microsoft & IBM

While revenue growth for IBM has been elusive, with revenues down 2% in the most recent quarter (1% excluding the company’s divested customer-care outsourcing business), the company managed to drive diluted earnings-per-share growth of 42% year over year and net income up 28%. This net income growth appears to be driven by lower operating expenses (down 14% year over year) and slightly higher gross profit margins. Earnings-per-share growth outpaced net income growth, as the share count dropped 9% from the year-ago period because of buybacks.

Chip giant Intel reported results that showed strength in the business PC space as well as the datacenter. This bodes well for Microsoft, as it is not only exposed to the PC side of things with Windows and Office, but it is also exposed to the datacenter with its multitude of server- and cloud-based products, such as Windows Server, SQL Server, and Azure. Microsoft is slated to report its third-quarter results after the close on July 22.

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Software Stocks Financial News

Both the stocks Microsoft & IBM provide good choices for the buyers. The stocks seem to be heading towards higher scales in the coming months. Most of the analysts have conferred a BUY for the two stocks. Whether the stocks are truly profitable remains to be seen.

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