Arrow,
Thank you for your, as usual, very knowledgeable and informative answers to my questions. As you know I also lived through those days of IBM's "price bundling". Therefore, I really was much more interested in your impressions of IBM's earnings numbers than price bundling. You see, I continue to be very puzzled by how you, (or for that matter any analyst), can forecast IBM's earnings so consistently without knowing that there was, or will be, a $.04 benefit to IBM from currency translation this quarter, or a 3.6% benefit from a lower tax rate y t y, or the benefit from the unknown number of IBM shares bought back, This quarter there were some 50 million fewer shares than there were a year ago. The latter alone added some 6 % + to earnings y t y.
Doesn't it not trouble anyone, besides me, that IBM is growing revenues by only 6 to 9% with consistently lower Gross Profit Margins, and yet the stock is selling for a P/E multiple of greater than 30.... a P/E almost twice that of just one year ago.
Regards,
Jules |
