The Ratings Game: IBM could struggle just to meet its disappointing outlook

International Business Machines Corp. will be challenged in the short term to stabilize its margins, meet its somewhat disappointing outlook and maintain a minuscule tax rate, analysts said Friday.

IBM IBM, -3.99% shares started falling late Thursday and dropped 4% to close at $162.37 Friday, after the company offered a disappointing outlook along with an earnings beat and return to revenue growth following 22 straight quarters of declines. Friday marked the biggest one-day percentage drop for the stock in six months, when shares fell 4.2% on July 19, and wiped out gains from earlier in the week. By comparison, the Dow Jones Industrial Average DJIA, +0.21% , which counts IBM as a component, rose 0.2% Friday for a 1% weekly gain, and the S&P 500 index SPX, +0.44% advanced 0.4% for a 0.9% weekly gain.

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