IBM Message Board - Msg: 20315018

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Technology Stocks : IBM

IBM 306.44

-1.9%

Nov 7 9:30 AM EST

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To: Raymond L. Stevens who wrote (8001)	7/15/2004 7:20:21 PM
From: Arrow Hd.	of 8218

IBM had a decent report this evening. Listened to the CC and came away with the following information and observations. --IBM experienced quarter ending deferrals of software orders similar to a lot of the other large enterprise software competitors. The company feels these orders have a good chance to close in 3Q. (That is probably the case for the other software companies too.) --Projections for Y/E per analyst's mean estimates are reasonable. There was a Q on this point and the CFO would not commit to quarterly forecasts. Reiterated that the Y/E estimates are reasonable. Reasonable was the key operative word. --Hardware did well and there was no late June slippage. Z/series (mainframes) did exceedingly well and celebrated the 40th anniversary of the mainframe. So much for their death. A lot of the demand is new workload, consolidations of networks and Linux applications. Two other hardware lines suffered stall due to hardware product line transitions. --Q&A session produced nothing earth shattering. Overall, good report and optimistic forward outlook. Read the press release for details. Stock did nothing in after hours. Stock price is probably a "market performer", it went down with tech the last month or so and when we get a rally from here (August?) it probably trades back up to mid 90s. Low risk investment at these levels but upside is measured and there are better percentage gains opportunities in some of the software, storage and communications areas. I believe that IT spending has switched to replacing hardware infrastructure deficiencies which have been deferred for a couple of years now in favor of software productivity tools and that is why 2Q expense money went into hardware but I think the software decisions will firm up in the third and fourth quarter. This was deferred demand not perishable demand. But it pays to wait for the earnings and CCs though to find out what is happening.

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