All: Look at IBM earnings, and CPQ earnings vs. AAPL. IBM today:
News Alert from AP Online via Quote.com
Topic: (NYSE:IBM) Intl Business Machines Corp, (NYSE:CPQ) Compaq Computer Corp,
Quote.com News Item #6182329
Headline: IBM Posts 13 Pct. Drop in Profits
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By DAVID E. KALISH
AP Business Writer
NEW YORK (AP) - International Business Machines Corp. on Monday
said first-quarter profits dropped 13 percent, hurt in part by a
price-cutting war in personal computers and weak consumer demand in
Asia.
But the results slightly beat the expectations of Wall Street
analysts as IBM enjoyed a 22 percent increase in revenue from its
global services unit, a fast-growing business that helps companies
set up computer systems and networks.
The Armonk, N.Y.-based company said in the three months ended
March 31, it earned $1.04 billion, or $1.06 a share, down from a
profit of $1.20 billion, or $1.16 a share, in the year-ago quarter.
Revenue edged up 1.8 percent to $17.62 billion from $17.31
billion.
Analysts surveyed by First Call expected IBM to report a profit
of $1.05 a share. The results were reported late in the trading
day, and the better-than-expected performance enabled the New York
Stock Exchange-listed IBM to add to earlier gains. It rose more
than 3 percent, or by $3.37 1/2, to close at $111.12 1/2 a share.
IBM said that a price war in the PC business caught it off guard
in the first quarter, dragging down hardware revenue 8 percent. As
it and other PC makers overestimated demand from customers, the
industry aggressively cut prices to try to unload bloated
inventories. Last week Compaq Computer Corp., the No. 1 PC maker,
reported that flat computer sales nearly wiped out its profit in
the first three months of the year.
''We made the decision to protect our franchise and to compete,
and compete strongly,'' IBM chief executive Louis V. Gerstner said
in a statement.
IBM interim chief financial officer Lawrence R. Ricciardi said
in a teleconference that the company was trimming computer
inventories to levels expected to stabilize PC prices later this
year.
Sales of IBM's more powerful business computers were mixed.
Elsewhere at IBM, revenue from software grew 2.3 percent to
$3.02 billion, rentals and financing rose 10.7 percent to $996
million and computer maintenance dropped 7.9 percent to $1.48
billion.
While the PC price-cutting war was unexpected, IBM previously
warned that its results would be hurt by weakness in Asia, a strong
dollar, and the expense of a marketing campaign built around the
Olympics.
However, faster growth in Europe helped offset the decline in
demand resulting from Asia's economic slump. |
