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Technology Stocks : IBM
IBM 312.17+2.6%Jan 12 3:59 PM EST
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To: Arrow Hd. who wrote (7900)4/14/2003 6:00:59 PM
From: Arrow Hd.  Read Replies (1) of 8220
 
Listened to the CC. Went through the normal charts, etc. The .79 EPS was a surprise to the analysts and one of the analysts asked how they could miss by a penny. Joyce mentioned that the share count was higher due to a less robust buy-back and some of the weaker areas affected margins but highlighted that they were managing to their strategy and they grew revenue. Without going through all the charts, which you can pull up on the IBM website, here is what I walked away with:
--Full year consensus is attainable. Comfortable with consensus.
--2Q is dependant upon closing the business in the pipeline. The analysts keyed on this and it seemed like a hedge to me but he came back with the pipeline bit. Did not warn though.
--Mainframe cycle caused market stall (still very profitable area). New product in 2Q.
--Some areas under-performed and caused a 3 cent under contribution.
--Acquisitions (PWC, etc.) providing revenue boost in 2003 and a profit boost in 2004.
--DSO increased due to PWC.
--Product set performances mixed; PCs, Mainframes, and technology sales down, P/I/X/Shark sales up, Software performance seemed better than what we heard from the industry last week.
--Again, confident about 2003 but qualified the 2Q results by emphasizing the need to close the business in the pipeline.
Other than the miss by a penny on EPS (pro forma I might add) the results were around what I guessed might happen. I think the analysts were uncomfortable with the 2Q answers and the penny miss. I guess we'll see their reaction tomorrow.
The above is a best-efforts attempt to report what I heard. I have no current position.
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