INSTANT VIEW: IBM Q1 rev disappoints, Texas Instruments solid

NEW YORK/BOSTON (Reuters) - IBM disappointed investors on Monday with lackluster quarterly revenue, but Texas Instruments afforded the market some cheer with a solid sales performance.

IBM reported a bigger-than-expected 11 percent fall in quarterly sales, showing that even one of the healthier U.S. technology companies is getting hurt by a slowdown in corporate spending. Shares in the firm slid more than 3 percent in after-hours trade.

In contrast, Texas Instruments posted better than expected revenue as demand for its chips seemed to stabilize. Its stock inched upward after the bell.

COMMENTARY ON TEXAS INSTRUMENTS

ASHOK KUMAR, ANALYST, COLLINS STEWART

"It appears that the industry and TI in particular are putting in a bottom for the March quarter.

"The big primary structural headwind for the company is the wireless market and we think the revenue will stabilize at these depressed levels and find its way back."

ADAM BENJAMIN, ANALYST, JEFFERIES & CO.

"Obviously the revenue came in a little bit higher. We had thought it was going to be coming in at the higher end at $1.95 (billion) so $2.09 was better than what anyone I was talking to had indicated or thought.

"The gross margins were a little bit lower..., they had talked of around 40 percent. The guidance implies a little bit better uptake from their factories.

"Everybody knows it's better, you heard that out of Intel last week and others that have reported so far early on. So I think the expectation is business is better, earnings estimates are going up..., so there's some cautious optimism."

DOUG FREEDMAN, ANALYST, BROADPOINT AMTECH

"Revenue clearly came in stronger than expected. The rest of it is really adding up to close to what was expected.

"The guidance for the June quarter was above both mine and the Street's, so very strong... The trough isn't as deep and it's also not as long because they're guiding up.

"Past cycles have taken 3 quarters to work their way out. Now clearly this is two quarters they'll be down before the third quarter is expected to be up."<

COMMENTARY ON IBM:

ANDY MIEDLER, ANALYST, EDWARD JONES

"These were decent results in light of the challenging economy. Certainly the top line is being impacted by the weak economy. IBM is managing the business well, focusing on expense control, and its movement to software and services is clearly evident in the increasing profitability. Net-net we think this is a decent quarter.

"The top-line wasn't quite what investors were looking for, that's clearly the result of the weak economy but also the strength of the U.S. dollar."

JAMES BREHM, ANALYST, FROST & SULLIVAN

"One of the things that stands out when I look at IBM's announcement were the 16 services deals greater than $100 million. Services is really bringing those guys along...I think it's a better day to be at IBM than it is at Oracle."

TIM GHRISKEY, CHIEF INVESTMENT OFFICER, SOLARIS ASSET

MANAGEMENT

"It's good. I was wondering why the market was starting to rally, now I see why. Ahead of pace for 2010 roadmap of $10 to $11 per share. This is a very good quarter, well above expectations.

"Not quite sure where the light revenues are coming from, but I'd say that's a secondary issue, especially since they reaffirmed guidance above the consensus. The market in the after-hours is reacting very positively to it. Their long term outlook is very good.

"The consensus for 2010, which admittedly is very far out, is $9.78 and they are going to do $10 to $11. Revenues were impacted by a strong dollar. Understandable, certainly explainable...but it's going to take a while to verify that.

"Tax rate did help some, it was a full percentage point less than last year in the first quarter. Over $12 billion in cash on hand, this is a company that can do a major acquisition. Strong free cash flow, strong balance sheet. So this is a very good quarter and it should certainly help the markets tomorrow."

ZACH ROSENSTOCK, ANALYST, WAYNE HUMMER WEALTH MANAGEMENT

"It looks like people aren't too happy with what they are seeing. For me the thing that's upsetting is revenues, down 11 percent.

"It's echoing some of the things we've seen from other companies, saying revenues aren't that good but earnings are really strong.

"They reiterated guidance...but people really want to see the revenues pick up. For a while, (better-than-expected earnings) was driven by top-line growth, now you are getting it from profit margins or adjustments here and there."

PETER MISEK, ANALYST, CANACCORD ADAMS

"It's kind of as expected. They beat on EPS. They reiterated on guidance. I didn't expect them to miss on revenue by that much, which is probably why the stock is trading off.

"Short-term bookings look a little weaker than everybody had hoped. That probably means that the next quarter will be mixed. The long-term guide looks solid."

(Reporting by Jim Finkle, Bill Rigby and Gabriel Madway, Compiled by Edwin Chan)