IBM to Wall Street-'I got your Y2K right here' (they are from NY you know).
Hey Frank check this out.
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Thursday, April 22, 1999
IBM could see little Y2K effect, its CFO says
April 21, 1999 10:45pm
Reuters
By Eric Auchard
NEW YORK, April 21 (Reuters) - IBM <IBM.N> Chief Financial Officer Doug Maine on Wednesday said he is growing more confident that fears of a corporate spending slowdown on new computer equipment later this year could be overblown.
Maine was responding to nagging concerns that International Business Machines Corp., the world's largest computer maker, and the technology industry generally, could see a sharp decrease in additional spending by corporate technology purchasers in 1999.
He took issue with the view that spending on new computer equipment will necessarily dry up later this year as customers focus on fixing older machines to prevent potential Year 2000 software glitches before the millennium date change.
"We are increasingly getting more comfortable that there isn't going to become some sort of nuclear winter as some prognosticators would have it," Maine told Reuters in a phone interview, referring to the debate over whether customers may freeze computer spending.
"Certainly we have a much better feel for the second quarter than we have for the third or fourth quarter," Maine said in describing his view of the rest of 1999. He was interviewed after IBM's first-quarter results were released.
Citing industry surveys of customer information technology spending plans, Maine reiterated his support for studies showing that computer sales will again grow by 9 percent worldwide in 1999, in line with the industry pattern of recent years.
Still, he noted he has no crystal ball to predict the effects that computer repair work to avert Year 2000 software glitches might have on other computer spending. "This is an event that has never happened before," he said.
"I think it could -- not will -- but could" have little impact, he said during the interview, when asked if it was possible that a threatened slowdown might fail to materialize.
"This could end up ... looking like prior years -- maybe even slightly better than last year," he said, responding to a question of whether it was possible that Year 2000 repairs would cause no slowdown in computer markets after all.
In a conference call with Wall Street analysts that followed the company's earnings report Wednesday, Maine displayed a mix of caution and optimism on the impact of Year 2000 spending.
He said studies of the potential impact of Year 2000 testing and repair work on spending for new computer equipment had been inconclusive. "So far the picture is really mixed," he said.
But in response to an analyst's question about what, if any, specific evidence IBM had seen that Year 2000 fixes might lead to a further, unexpected slowdown in computer spending in 1999, Maine sought to neutralize the fear of the unknown.
"There's an absence of anything we're hearing from customers that suggests a slowdown," he said.
After a question, Maine denied that the company had attempted to boost customer spending in the first quarter to offset any potential shortfall in sales that might result from a slowdown in computer spending later this year.
"We saw no real changes in customer buying patterns," he said of first quarter results.
Nonetheless, IBM first-quarter results exhibited stunning increases in revenues to $20.3 billion, up 15.3 percent year-over-year, and $1.47 billion in net income, a rise of 42 percent -- far outpacing Wall Street's range of expectations.
In response, IBM stock soared in after-hours trading, gaining more than $17.50 to trade at $189.37, adding to a gain of $2.12 during regular session trading on Wednesday.
(Source:Reuters via ZDII) (((-- Eric Auchard, New York newsdesk, 212-859-1840)) |
