INSTANT VIEW: IBM results, outlook beat expectations

NEW YORK (Reuters) - IBM, the biggest technology services company, posted a quarterly profit and full-year outlook that topped Wall Street expectations, sending its shares up 3 percent.

COMMENTARY:

MICHAEL JAMES, SENIOR TRADER AT REGIONAL INVESTMENT BANK WEDBUSH MORGAN IN LOS ANGELES

"The bar was set pretty low going into the earnings given what has been going on in the market overall in the last two weeks."

"It is certainly a welcome positive; we haven't had too much positive news over the course of the last week."

"I'd be surprised if the stock gives back that much -- if any -- of the gains we are seeing after hours."

"IBM by itself should have a positive effect on the overall market, and technology specifically. But the developments among financials have been playing a much greater part in the market sentiment. So I wouldn't want to make too big a case about IBM's impact on the market tomorrow without knowing what else might happen world wide between now and tomorrow's market open."

ANDY MIEDLER, ANALYST, EDWARD JONES

"Overall I think these were good results given this tough environment. IBM clearly is watching their expenses closely which we believe is very important in the environment."

"I think it comes down to IBM can't control its revenue in this environment so they're focusing on cost control which is what you'd hope for."

"I think it all comes down to management teams that get it. IBM clearly has a management team that over the long term has proven they can manage this business in good and bad economic times."

CHRIS WHITMORE, ANALYST, DEUTSCHE BANK

"There has been pretty solid execution on the profitability and margin line. People are reacting positively to both the bookings number and the earnings guidance."

"$17 billion plus in bookings is well above anybody's expectations. Also the growth in their services backlog -- which was up $3 billion quarter on quarter to $117 billion. And you have earnings guidance that was better than most people on the Street were expecting."

"In a pretty tough environment this shows that IBM is executing quite well.

"This gives us visibility into this year, which is something the market is lacking right now."

ZACH ROSENSTOCK, ANALYST, WAYNE HUMMER WEALTH MANAGEMENT

"I think everybody realized it's going to be a difficult revenue environment with currency and other things turning against them, but they showed solid cost control and gross margins were up 300 basis points year over year. These are certainly good things."

On guidance:

"It's 45 cents ahead of what consensus had expected."

"My thinking would be is they're doing something right. They've created a company that everybody knows will be around. And you see the scandal with Satyam and other things coming up, with smaller companies, who knows where they'll be in a year in these uncertain economic times. They have proven they can perform as expected and provide a solid service for customers."

"I think it should continue to be a core holding in someone's portfolios."

KIM CAUGHEY, SENIOR ANALYST, PITTSBURGH-BASED FORT PITT CAPITAL GROUP, WHICH HOLDS IBM SHARES IN ITS $800 MILLION PORTFOLIO

"I think the results are pretty good. I always first go to the margins and they have improved."

"This is a real testament to the CFO, who said at analyst day that they wanted to take out another $1 billion in costs. They've been trying to do this for several years, so analysts were very skeptical. But they did it. Good for them. Good for shareholders."

KEITH WIRTZ, PRESIDENT AND CHIEF INVESTMENT OFFICER, FIFTH THIRD ASSET MANAGEMENT

"The market is exhaling."

"I think the market has been holding its breath to see if it would be close... We're feeling pretty good about it."

On earnings outlook for 2009:

"That seems high. Our numbers are around the lower 8's. We've been pulling ours down because of the uncertain environment of economic conditions."

"IBM has enjoyed certain attributes that other tech stocks don't enjoy. They have recurring revenue streams that also translate into profitability... That's great for IBM and that's one of the reasons why, in today's uncertain environment, IBM's a very attractive name to hold.

"We're buying the stock."

PETER MISEK, ANALYST, CANACCORD ADAMS

"The guidance of $9.20 is awesome... looks like their outsourcing, packaging, cost containment strategy is working. They executed really well."

"As sales seem to be getting hit they're pulling cost containment and cost reduction levers all over the place. I still expect a major restructuring."

"I think it's really tough to read this more broadly into the tech sector...IBM has done a really good job of positioning itself as a cost containment strategy. It does provide a data point but I'd like to see what Microsoft, Intel and a bunch of the others do. My suspicion is that we'll see that the global consumer is in a severe recessionary state and that enterprises are only just entering that state."

(Reporting by Gabriel Madway in San Francisco, Jim Finkle in Boston, and Ritsuko Ando and Rodrigo Campos in New York, compiled by Tiffany Wu)