We begin our analysis of IBM with a look at their first quarter of 2001 earnings presentation. We will not be looking just at earnings numbers, but look at other measures and benchmarks that can give us an idea of where IBM is headed in the future. It is very important to look directly at the company's financial statements instead of reading managements comments at the beginning.
Management has a tendency to mention many of the positives and few of the negatives.
An astute investor will always read the financial statements in any earnings report. We should first examine the type of industry that IBM operates in. IBM makes computing devices and accessories for both personal and business use. Although they are best known for desktop computers, this business is gradually declining and other segments are now accounting for majority of their business. Other hardware products and consulting services now account for a major portion of IBM's revenues.