Big Blue’s Earnings Rise, Shares Fall

Perennial tech blue-chip IBM (IBM) handily beat analyst expectations when it reported Q4 earnings Tuesday after the bell. The Armonk, NY based company reported earnings of $3.59 / share, beating consensus estimates by $0.12. Revenues came in at $27.2 billion, also beating estimates, and FY 2011 guidance came in at the high end of the prior-announced range.

All of the above notwithstanding, IBM followed suit with Intel (INTC) last Thursday and sold off following a solid earnings beat. Shares are down 1.85% after-hours, erasing a 1.79% gain during regular trading. Shares had rallied upwards of 12% during the past 2 months, and the post-beat sell-off has some thinking that the better than expected results may have already been baked in.

Since shares are selling off following a great report, it would certainly be prudent to stay on the sidelines with this one until we have a better idea of if / how the Street’s perception of the stock has changed. Assuming tonight’s sell-off leaks into tomorrow, the first thing I’d be on the lookout for is whether big blue can hold it’s 50-day MA, which is currently situated at $128.75. If, on the other hand, a continued sell-off does not occur tomorrow, I would be willing to pick up some shares if they can power up to a new high, above $134.25.

Disclosure: No positions in IBM.

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