Last quarter, IBM almost fooled the market when it "beat" but only thanks to using the lowest effective tax rate in recent history (excluding one charge-fulled quarter when the rate was negative).

Well, fast forward one quarter when IBM has done it again, if only on a GAAP basis, because in the three months ended March 31, IBM reported GAAP pre-tax net income of $1.424BN. What was its after tax net income? Some $326 million higher, or $1.750 million to be precise. In other words, no longer bothering with flowing a positive GAAP tax rate through the P&L, IBM went negative to the tune of -23.1%.

Of course, when it comes to IBM it is all about non-GAAP results, which in Q1 were EPS of $2.38, "beating" estimates of $2.35 by a paltry 3c. Amusingly, it was its non-GAAP EPS that IBM applied a tax rate to which according to the company was 12% and 15%, on a GAAP and non-GAAP basis:

For the first quarter, IBM’s ongoing effective GAAP tax rate was approximately 12 percent. The ongoing effective operating (non-GAAP) tax rate was approximately 15 percent, which is within the expected range of 15 percent plus or minus 3 points provided earlier this year. IBM’s reported tax rates include the effect from a discrete tax benefit disclosed earlier this year

However, while IBM is truly a wizard when it comes to fudging the bottom line, there was nothing it could do about the top line, and it was here that IBM's troubles emerged, because not only did IBM not beat modest estimates of $18.4 billion, printing $18.2 billion, the lowest since Q1 2002...

... but this was also the 20th consecutive quarter of declining revenues for the company which lately can't seem to get any traction on the top line.

Away from the top and bottom line, IBM reported that in Q1 it generated net cash from operating activities of $4.0 billion, or $1.9 billion excluding Global Financing receivables. IBM’s free cash flow was $1.1 billion, down year to year consistent with the amount of the Japan tax refund received in the first quarter of 2016. IBM returned $1.3 billion in dividends and $1.3 billion of gross share repurchases to shareholders. At the end of March 2017, IBM had $3.8 billion remaining in the current share repurchase authorization.

IBM ended the first quarter of 2017 with $10.7 billion of cash on hand. Debt, including Global Financing debt of $28.5 billion, totaled $42.8 billion, up from $42.2 billion at the end of 2016.

The stock, predictably, tumbles again, down nearly 4% after hours and roundtripping the entire past quarter's gains.