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Equities in Focus - International Business Machines Corp. (NYSE:IBM), American International Group Inc (NYSE:AIG), DexCom, Inc. (NASDAQ:DXCM)

Equities in Focus - International Business Machines Corp. (NYSE:IBM), American International Group Inc (NYSE:AIG), DexCom, Inc. (NASDAQ:DXCM)
Written by
Joel Najarian
Published on
October 20, 2014
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International Business Machines Corp. (NYSE:IBM) shares fell to their lowest level since September 2011 before the market open after reporting Q3 earnings that missed analysts' expectations and as it cut its guidance for FY operating EPS and removed its guidance for 2015. The 52-week range is between $172.19 and $199.21. IBM said it now expects 2014 operating EPS to fall between 2% and 4% from $16.64 in 2013. Upon releasing Q2 earnings, IBM reaffirmed its guidance of non-GAAP operating EPS of "at least" $18.00. International Business Machines Corp. (NYSE:IBM) said Monday the cut guidance "reflects new definition based on continuing operations." It also said Monday that it no longer expects to deliver "at least $20 operating EPS" in 2015 and that it will provide a guidance for 2015 in January.The information technology company reported a 10% drop in Q3 earnings to $3.68 per share, well below the analyst consensus of $4.32 per share on Capital IQ. Revenue was $22.4 billion, down 4%, and down 2% when adjusting for divested customer care and outsourcing business and currency. The Street view was $23.3 billion. Cloud revenue was up more than 50% year-to-date, while business analytics revenue gained 8%; mobile revenue more than doubled; and security revenue was up greater than 20% (all year-to-date growth numbers).Earlier today IBM announced a deal to sell its Microelectronics OEM semiconductor business and manufacturing operations to GLOBALFOUNDRIES. The loss from discontinued operations in the third quarter includes a non-recurring pre-tax charge of $4.7 billion, or $3.3 billion, net of tax. The charge includes an impairment to reflect fair value less estimated costs to sell the Microelectronics business assets, which the company has classified as held for sale at September 30, 2014. The charge also includes other estimated costs related to the transaction, including cash consideration expected to be transferred to GLOBALFOUNDRIES of approximately $1.5 billion. The cash consideration is expected to be paid to GLOBALFOUNDRIES over the next three years and will be adjusted by the amount of the working capital due by GLOBALFOUNDRIES to IBM, estimated to be $0.2 billion. In addition, discontinued operations includes operational net losses from the Microelectronics business of $0.1 billion in both the third quarter of 2014 and the third quarter of 2013.Insurance company American International Group Inc (NYSE:AIG) has been upgraded by analysts at Deutsche Bank to a buy rating from a hold. The firm also raised its price target on the stock to $60 from $59 a share, which marks a potential upside of 18% from its Friday closing price. Shares of American International Group Inc (NYSE:AIG) were up 1.2% to $51.37, moving within a 52-week trading range of $46.80 - $56.56.DexCom, Inc. (NASDAQ:DXCM) said it has received U.S. Food and Drug Administration approval for its CGM remote mobile communications device, Dexcom SHARE, which uses a wireless connection to transmit the glucose levels of a person with diabetes to the smartphones of up to five designated recipients. "Dexcom SHARE represents a significant advance in diabetes care by allowing people with diabetes to share important glucose information with their loved ones from afar," said CEO Terrance H. Gregg. "With Dexcom SHARE, users, parents and personal caregivers now have a new tool to dramatically improve how they communicate about their diabetes." DexCom, Inc. (NASDAQ:DXCM) shares are trading in a 52-week range of $27.10 to $49.83.

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