IBM Stock Had a Terrible Quarter: Here's Why It's Still a Buy

Analysts more or less knew International Business Machines (NYSE: IBM) was going to post lackluster fourth-quarter numbers. But they underestimated just how tough things were during the three-month stretch ending in December.

Revenue not only fell 6% year over year, to $20.4 billion, but it fell short of the consensus estimate of $20.7 billion. Earnings, at $2.07 per share, technically topped expectations of $1.79, but it's a dubious win. Profits were still down from the year-earlier figure of $4.71 per share. Despite the company's relatively rosy outlook for the year now underway, the market saw the glass as half-empty. IBM stock took a 10% tumble, moving back within reach of multiyear lows reached in March of last year.

This sell-off is ultimately a buying opportunity, however, for investors willing to look more than a few weeks ahead. Not only is IBM now on the right path, but investors are being paid a fat dividend while waiting for IBM's regrouping plans to pan out.

Source Fool.com