Adam Hartung,
en Forbes, comenta la evolución financiera y de bolsa de IBM reciente, poniendo en evidencia la errática conducción de la corporación, y su inexplicable estrategia...Hartung pone en el centro de sus decisiciones descaminadas,
la baja de su inversión en investigación, lejos de lo que fuera por décadas, y la
recompra de acciones, incluso recurriendo a endeudamiento. Hartung apunta a un problema de conducción de la empresa, focalizando en su actual CEO, aunque probablemente podamos hablar de más tiempo...
Why You Don't Want to Own IBM
IBM just finished a tough week. IBM fell
2% after announcing earnings on Wednesday, dragging the Dow Jones
Industrial Average (DJIA or Dow) down over 100 points. And as the Dow reversed course to end up 2% on the week, IBM continued to drag, ending down almost 3% for the week.
Of course, one bad week – even one bad earnings announcement
– is no reason to dump a good company’s stock. The vicissitudes of
short-term stock trading should not greatly influence long-term
investors. But in IBM’s case, we now have 8 straight quarters of weaker revenues. And that HAS to be disconcerting. Managing earnings upward, such as the previous quarter,
looks increasingly to be a short-term action, intended to overcome
long-term revenue declines which portend much worse problems.
This revenue weakness roughly coincides with the tenure of
CEO Virginia Rometty. And in interviews she increasingly is defending
her leadership, and promising that a revenue turnaround will soon be happening.
That it hasn’t, despite a raft of substantial acquisitions, indicates
that the revenue growth problems are a lot deeper than she indicates.
CEO Rometty uses high-brow language to describe the growth problem, calling herself a company steward who is thinking long-term. But as the famous economist John Maynard Keynes pointed out in 1923, “in the long run we are all dead.”
Today CEO Rometty takes great pride in the company’s legacy,
pointing out that “Planes don’t fly, trains don’t run, banks don’t
operate without much of what IBM does.” But, powerful as that legacy
has been, in markets that move as fast as digital technology any company
can be displaced very fast.
Just ask former CEO Scott McNealy and his leadership team at
Sun Microsystems. Sun once owned the telecom and enterprise markets
for servers – before almost disappearing and being swallowed by Oracle
in just 5 years (after losing $200B in market value.) Or ask former CEO
Steve Ballmer at Microsoft, who’s delays at entering mobile have left
the company struggling for relevancy as PC sales flounder and Windows 8
fails to recharge historical markets.
Managing earnings is not managing for long-term success
CEO Rometty may take pride in her positive earnings
management. But we all know that came from large divestitures of the
China business, and selling the PC and server business to Lenovo. As
well as significant employee layoffs. All of which had short-term
earnings benefits at the expense of long-term revenue growth. Literally
$6B of revenues have been sold off just during her leadership.
Which in and of itself might be OK – if there was something
to replace those lost sales. Even if they didn’t have any profits –
because at least we have faith in Amazon creating future profits as
revenues zoom. But IBM was far late to the cloud, and hasn’t shown it
has anything to leapfrog industry leaders.
The REAL problems – R&D cuts, higher debt, massive stock buybacks
What should terrify investors about IBM are two things that
are public, but not discussed much behind the hoopla of earnings,
acquisitions, divestitures and all the talk, talk, talk regarding a new
future.
CNBC reported that 121 companies in the S&P 500 (27.5%) cut R&D in the first quarter.
And guess who was on the list? IBM, once an inveterate leader in
R&D, has been reducing R&D spending. The short-term impact?
Better quarterly earnings. Long term impact????
The Washington Post reported
more this week about the huge sums of money pouring out of corporations
into stock buybacks rather than investing in R&D, new products, new
capacity, enhanced marketing, sales growth, etc. $500B in buybacks this year, 34% more than last year’s blistering buyback pace,
flowed out of growth projects. To make matters worse, this isn’t just
internal cash flow spent on buybacks, but companies are actually
borrowing money, increasing their debt levels, in order to buy their own
stock!
And the Post labels as the “poster child” for this leveraged stock-propping behavior…. IBM. IBM
“in the first quarter bought back
more than $8 billion of its own stock, almost all of it paid for by
borrowing. By reducing the number of outstanding shares, IBM has been
able to maintain its earnings per share and prop up its stock price even
as sales and operating profits fall.
The result: What was once the bluest
of blue-chip companies now has a debt-to-equity ratio that is the
highest in its history. As Zero Hedge put it, IBM has embarked on a
strategy to “postpone the day of income statement reckoning by
unleashing record amounts of debt on what was once upon a time a
pristine balance sheet.”
In the case of IBM, looking beyond the short-term trees at the long-term forest should give investors little faith in the CEO or the company’s future growth prospects. Much is being hidden in the morass of financial machinations surrounding acquisitions, divestitures, debt assumption and stock buybacks. Meanwhile, revenues are declining, and investments in R&D are falling. This cannot bode well for the company’s long-term investor prospects, regardless of the well scripted talking points offered last week.
No hay comentarios.:
Publicar un comentario