Two household names, International Business Machines Corporation (NYSE: IBM) and the American Express Company (NYSE: AXP), reported fourth-quarter and full-year 2016 financial results after the finish of regular trading this afternoon. Of the two, IBM has performed better for investors over the past 12 months, with shares increasing in value by 35.6 percent. Over the same period, AXP stock gained 22.9 percent and the broad market, as measured by the Dow Jones Industrial Average, gained 24.1 percent, as reported by Yahoo Finance.
In April 2016, longtime American Express shareholder, CEO of Berkshire Hathaway Inc.
(NYSE: BRK-A, BRK-B) Warren Buffett, was quoted by Fortune expressing a belief that the charge and credit card company was "under attack," but that it remained an "attractive" business and that many "companies are not as great as they used to be."
AXP stock down modestly on Amex earnings
AXP stock is about 0.25 percent lower in after-hours action, on the employer of close to 55,000's financial results. Amex earnings, on a per share basis, were reported as $0.91, missing the Wall Street analyst consensus, as reported by Yahoo Finance, of $0.98, by $0.07, or 7.1 percent. AXP EPS was down 26.0 percent, from $1.23, on a year-over-year basis. Revenue for the New York City-headquartered financial giant, which was founded in 1850, came in at $8.02 billion, beating expectations of $7.95 billion, by $70 million, or 0.9 percent.
Year over year, revenue was down 4.4 percent, from $8.39 billion.
A webcast conference call is scheduled for 5 p.m. ET, where Chairman and Chief Executive Officer Kenneth Chenault and his staff will discuss this evening's numbers with investors. A rebroadcast of the audio is set to be made available on the American Express shareholder's website after the call's conclusion.
The CEO was quoted by Business Wire with regard to the "sense of urgency" the company felt in early 2016 and that he feels that "subsantial progress" has been made toward his goal to change the firm's "trajectory."
IBM stock lower in late trading
IBM reported EPS of $5.01, handily beating the view on the street of $4.88, by $0.13, or 2.7 percent; EPS was up $0.17, or 3.5 percent, from $4.84, year over year.
Revenue for Big Blue was stated as $21.77 billion, beating the consensus of $21.64, by $130 million, or 0.6 percent; revenue was down from $22.06 billion in the fourth quarter of 2015, by $290 million, or 1.3 percent. IBM stock is lower, by more than 1 percent, in the after-hours on the news.
A conference call, accessible from the IBM website, is scheduled for 5 p,m. ET. Chairman and CEO Ginni Rometty held up IBM Watson as the "world's leading AI platform for business" and the tech giant as the "industry's leading cognitive solutions and cloud platform company" overall.
Going into today's report, IBM last reported a whopping 77.33 percent return on equity, as well as healthy operating and profit margins of 16.58 and 14.75 percent, respectively.
While the tech bellwether remains profitable, its growth rate does not match its 247.58 percent debt-to-equity ratio, nor its total debt position of $42.48 billion and cash position of $9.97 billion. Analysts expect 2.0 percent IBM EPS growth in 2017 and an average of 2.9 percent growth annually over the coming five years. Views will likely be revised with today's results.
