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Technology Stocks : Disk Drive Sector Discussion Forum -- Ignore unavailable to you. Want to Upgrade?

To: Mark Oliver who wrote (7094)	9/18/1999 3:43:00 AM
From: Gottfried	Read Replies (1) \| Respond to of 9256

Mark, I don't know anything about the hardware division's expected revenue growth. Maybe 'hardware division' is just ML's figure of speech. I admit I don't even know the current IBM org chart. Hardware revenues and gross margin improved from Q1 to Q2 [see below]. Have seen IBM hard drives advertised at Fry's today for about 1 cent per MB, though. [15.2 GB ultra DMA/66 $154, no rebate hassles]. In the first quarter report Gerstner said... Our operating results were excellent, led by services and software -- which together produced 60 percent of our gross profits this quarter. Our Technology Group results were mixed, with growth in hard disk drives offset by continued weakness in memory chips. Our PC unit also had substantially improved results. In the second quarter report praise of the DD area is absent... Louis V. Gerstner, Jr., IBM chairman and chief executive officer, said: "We continued to build on our strategic priorities in the second quarter. These priorities are focused on three areas: services, software, and the sale of our leadership technology to the marketplace. Our services business continued to show excellent results in the quarter. Our software unit once again turned in a very good performance, with particularly strong results from our database, transaction processing and Tivoli products. Although we saw price pressures in some areas of the technology segment, our technology business nevertheless performed well overall in a difficult environment. "The actions we're taking in our microelectronics and storage areas are intended to strengthen our technology segment substantially over the long term. With these actions, we are well down the path of exiting the high- volume manufacturing of DRAM chips, while shifting our resources toward the faster-growth, higher-margin custom chip area. In addition, we are taking various steps to integrate development and manufacturing activities in our hard disk drive business while reducing expenses. These steps will not only improve the competitiveness of our technology segment but will further strengthen IBM's overall business portfolio. Reading between Gerstner's lines it looks like IBM has not escaped the poor conditions in the DD industry. Link to quoted reports ibm.com Gottfried IBM $9,379 million hardware revenues in Q2, GM = 28.6% $8,584 " " " in Q1, GM = 27.2%