A few days ago, we posted a research note concluding that IBM Corp. (NYSE:IBM) was still undervalued. We mentioned that although the company is going through a tough time, its vision is inspiring and the direction that management has taken is correct. The market is underestimating the growing importance of its strategic imperatives and the growth catalysts that these businesses represent. Today's earnings' release supports this thesis. Although revenues keep declining, the decline is just 1.3% (0.7% currency-neutral). We expect the company's revenues to grow again in 2017.
IBM revenues may be in decline, but the future doesn't look bleak
Undoubtedly, IBM's core businesses are suffering and attributed revenues are declining. Total revenues declined from $92 billion in 2014 to $79.9 billion in 2016. Although these numbers look bad, most of the decline is due to currency fluctuations and divestitures. Adjusting for these factors, the annual decline is only 1.3%, and just 0.7% without currency effects.
