Robert, Here's more on IBM's earnings:
"IBM's Overfunded Pension Plan Won't Pump Up the Bottom Line"
Excerpt…
“Jeff Matthews of hedge fund Ram Partners in Greenwich, Conn., notes that from 1995 to 2001, when earnings per share rose 68% to $4.35 from $2.58, IBM's pretax profit rose only 8.9% to $11 billion from $10.1 billion. All of that gain -- and more -- can be accounted for via pension-fund gains.
Mr. Matthews thinks IBM wasn't really the success many think it was under Lou Gerstner, who stepped down as chief executive officer on March 1. Pretax profit from selling goods and services "actually dropped. They missed the entire technology market" boom from 1995 to 2001, says Mr. Matthews. Another value analyst, Ned Davis of Atlanta, looks at book value. He says that after a decade of "growth," IBM's book value is down 15% to $23.6 billion from $27.6 billion. During the 1990s, "little real value was built up in IBM," he concludes.”
online.wsj.com |
