International Business Machines (NYSE:IBM) ended 2017 on a solid note, as it reported accelerating revenue growth in the final quarter of the year. The results look stronger than they are, driven by the impact of a weaker dollar as that will provide a tailwind to 2018 results.
Organic growth remains very modest but at least is slightly positive. Following a recent 10% jump, I believe that expectations have been running a bit high into the earnings release, as the earnings results and outlook is not enticing enough to sustain the recent run higher.
Solid End To 2017
IBM posted a 3.5% increase in sales for the final quarter of 2017, which is reassuring after sales have been trending lower for years now. Not to say that this trend has officially reversed as sales were still down roughly a percent for the year, but at least, based on current momentum and exchange rates, one can expect modest growth in 2018. It should be said that a softer dollar has proven to be a real tailwind, as constant currency sales growth came in at just 1% in the final quarter of 2017.
