BM's PC Business Lost $1B Last Year
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.c The Associated Press
NEW YORK (March 24) - IBM lost nearly $1 billion selling personal computers last year, sharply higher than each of the previous two years, the world's largest computer company disclosed in a federal filing.
The pretax loss reinvigorated suggestions from Wall Street on Wednesday that IBM get out of the PC business that it pioneered and instead focus on selling corporate machines, software and computer advice.
IBM has not previously disclosed its PC losses, but new accounting rules stipulate that companies give more detailed financial results to investors. The late Tuesday filing showed IBM lost $992 million in 1998, $161 million in 1997 and $39 million in 1996.
Steve Milunovich, an analyst with Merrill Lynch & Co., said IBM's range of businesses was too broad to efficiently sell personal computers and still make money.
Prices of PCs have fallen sharply over the past two years, narrowing the profits manufacturers make on the machines. Profits are greater on selling powerful computers to businesses.
''IBM is not a consumer company,'' Milunovich said. ''They need to focus on corporate computing. and let DELL sell branded PC for them
Separately Wednesday, EMC Corp. agreed to purchase IBM disk drives for its computer data-storage systems as part of a five-year alliance valued at $3 billion.
IBM's stock rose more than 2 percent, up $4.12 1/2 to $169.50, on the New York Stock Exchange. |
