..." /> vowe dot net :: IBM Third-Quarter Earnings are out

IBM Third-Quarter Earnings are out

by Volker Weber

Revenues from the WebSphere family of software products increased 2 percent year over year. Information Management software revenues decreased 1 percent. Revenues from Tivoli software increased 5 percent. Revenues from Lotus software decreased 10 percent, and Rational software decreased 16 percent.

More >

Comments

Love all the "adjusted for currency" numbers. IBM makes a ton of money as, effectively, a bank, doing currency arbitraging.

Bob Balaban, 2012-10-17

I think Bob is confusing two concepts. IBM (and any company that sells products in multiple currencies) has to consolidate their results into a single currency. But the exchange rates change from quarter to quarter and year to year. Sometimes dramatically. So the various accounting rule makers (not IBM) came up with ways to present this information to investors. You want to be able to determine if IBM really sold more or less widgets, or if the numbers only changed because the exchange rate changed.

Quite separate from all of that, IBM and other companies of all sizes may hedge (not "arbitrage") their exposure to wild swings in exchange rates using financial instruments. The goal is to smooth out the bumps, not make money. By definition, they may make money in some periods and lose money in others, but if they are doing this right they will break even (minus transaction costs) in the long run. Similar to a farmer locking in the price for his corn in the grain futures market.

Arbitrage is when a commodity or security is priced higher in one market than another, presenting an opportunity for the alert investor to buy cheap and sell dear, until both markets are back in balance.

Carl Fink, 2012-10-17

Recent comments

Mueller Thomas on ginlo :: Jetzt schnell handeln at 00:20
Stefan Heinz on ginlo :: Jetzt schnell handeln at 00:08
Bernd Hofmann on ginlo :: Jetzt schnell handeln at 00:08
Benjamin Bock on ginlo :: Jetzt schnell handeln at 23:06
Volker Weber on Tagesangebote heute at 23:04
Samuel Orsenne on Morgen :: Apple Pay at 21:54
Andy Mell on Morgen :: Apple Pay at 21:18
Jochen Schug on Morgen :: Apple Pay at 20:59
Norman Cox on A view from my chair at 17:54
Volker Weber on Morgen :: Apple Pay at 17:44
Martin Imbeck on Morgen :: Apple Pay at 17:13
Dominique Roller on Morgen :: Apple Pay at 16:41
Mariano Kamp on Heading to the cardiologist :: Reddit at 16:19
Jan Van Puyvelde on Tagesangebote heute at 15:01
Karsten Lehmann on Morgen :: Apple Pay at 14:47
Johannes Matzke on Morgen :: Apple Pay at 14:45
Mariano Kamp on Morgen :: Apple Pay at 13:56
Volker Weber on Heading to the cardiologist :: Reddit at 13:54
Volker Weber on Tagesangebote heute at 13:50
Frank Köhntopp on Tagesangebote heute at 13:48
Patrick Bohr on Ein kleines persönliches Update at 12:27
Volker Weber on Heading to the cardiologist :: Reddit at 19:26
Mariano Kamp on Heading to the cardiologist :: Reddit at 19:25
Volker Weber on Heading to the cardiologist :: Reddit at 19:15
Joel Demay on Heading to the cardiologist :: Reddit at 19:07

Ceci n'est pas un blog

I explain difficult concepts in simple ways. For free, and for money. Clue procurement and bullshit detection.

vowe

Contact
Publications
Stuff that works
Amazon Wish List
Frequently Asked Questions

rss feed  twitter  amazon

Local time is 03:31

visitors.gif

buy me coffee