Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : IBM -- Ignore unavailable to you. Want to Upgrade?

To: Augustus Gloop who wrote (5664)	10/20/1999 7:11:00 PM
From: oilbabe	Read Replies (2) \| Respond to of 8218

trading below $100 on instinet.

To: Augustus Gloop who wrote (5664)	10/20/1999 8:32:00 PM
From: jhg_in_kc	Read Replies (5) \| Respond to of 8218

CONFERENCE CALL GRIM. Should I sell some I bot at 136? Cut loss? IBM sees Q4 profit far below consensus, Q1 shy too Wed Oct 20 9:14:00 NEW YORK, Oct 20 (Reuters) - International Business Machines Corp.on Wednesday warned slower spending by some big customers ahead of the year 2000 could rein in profits in the last quarter of 1999 and the first quarter of 2000. IBM's fourth-quarter earnings per share could be 15 cents to 20 cents below the $1.24 reported in the last quarter of 1998. That would put profits at between $1.04 and $1.09 a share -- 20 percent below the $1.33 consensus Wall Street analysts had forecast before his comments. "As we look toward the fourth quarter, the slowdown in high-end servers, remains an issue," Doug Maine, IBM's chief financial officer, told Wall Street analysts in a conference call after the release of its third-quarter earnings report. He predicted the traditional end-of-year jump in sales of certain large hardware systems would not occur this year as customers focus instead on fixing older equipment to avert potential Year 2000 software glitches. "Many (customers) will hold back on building on these applications until they get through the millennium," he said. "There were some that bought ahead, and others that delayed starts" on installing new IBM software and machinery. He said IBM's profits for the first quarter of year 2000 could be flat or slightly lower than its first-quarter 1999 profit of 78 cents a share -- which would put the earnings well below the 90 cents a share forecast by analysts surveyed by First Call/Thomson Financial. Even so, IBM urged analysts to stand firm on their estimates for the remaining quarters of 2000, when customers should return to their normal buying patterns. "Once we get past these lingering Year 2000 effects, we should see an acceleration of demand as customers resume more normal buying patterns," he said. "We see the pickup in the first quarter, but returning to normal trends in the second," he added, noting that company expects to deliver revenue growth in the high single-digit range for the full year. Afterward, in an interview, Maine told Reuters that he did not expect IBM to make up the first-quarter shortfall during the subsequent three quarters. "That's not to say we can or can't," Maine said, noting the difficulty of predicting any rebound in customer spending several quarters ahead. Maine said IBM's difficulties in the upcoming quarters were concentrated in the finance and insurance industries, where the mainframe computer maker has a disproportionate market share compared with other computer companies. "Year 2000 is particularly acute to us, being so heavily weighted in these markets," Maine said of how many of these customers have locked down spending on new computer systems while they fix their older mainframes and related systems. In its third-quarter, net income grew to $1.8 billion, or 93 cents per diluted share, which included a gain of 3 cents per share from various purchases and sales of assets. Excluding the gain, earnings matched expectations, but revenue growth of 5 percent was shy of analysts' targets. Investors dumped shares of IBM in after-hours trading sending them nearly $14 lower to $99, from the regular session close of $112-3/4. The stock had traded a little over $6 higher in regular-session trading in anticipation of better results. ((-- Franklin Paul, New York Newsdesk, 212-859-1893)) REUTERS Rtr 19:14 10-20-99