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Pastimes : All Clowns Must Be Destroyed -- Ignore unavailable to you. Want to Upgrade?

To: TheStockFairy who wrote (27498)	4/18/2000 9:02:00 PM
From: Cynic 2005	Read Replies (3) \| Respond to of 42523

I really really really really wish they just dump IBM right from the opening bell. I hope it craters some 50% tomorrow! I just can't take this kind of baloney forever from one company. --------------------- biz.yahoo.com Tuesday April 18, 8:37 pm Eastern Time Highlights from IBM Q1 conference call with CFO NEW YORK, April 18 (Reuters) - International Business Machines Corp. (NYSE:IBM - news) on Tuesday reported first-quarter earnings per share that beat expectations but that was overshadowed by a disappointing 5 percent drop in revenue. The following are highlights from comments made by IBM Chief Financial Officer John Joyce in a conference call with analysts held immediately following the first-quarter report: ON RESTRUCTURING ACTIONS AND COST-CUTTING -- the decision to exit the U.S. retail PC business cost the company $200 million in reduced inventories and another $200 million in lost sales of consumer PCs it might otherwise have counted on, Joyce said. -- as a result of the exit from U.S. retail, revenues from its Aptiva PC line fell 45 percent in the first quarter. -- IBM sales, general and administrative (SG&A) expenses were cut 6 percent during the first quarter. -- research and development expenses declined 1 percent. -- said company would increase investments in software, services and technology, its three key growth sources. As a result, Joyce said: ``I think you'll see slight expense growth for the year, given what you'll see in the second half.' SOME CAUSES FOR THE REVENUE DECLINE: -- said company's component supply division missed an industry shift to a new higher-speed hard disk drive, leaving IBM selling older technology to computer makers. ``We plan on shipping products shortly but will not ship in volume until the second half,' the IBM executive said. -- in microelectronics, or computer chip, supply business, Joyce said IBM had made improvements in shifting to more profitable product lines. Dynamic random access memory (DRAM) revenues declined 22 percent, amid an industry-wide decline in DRAM prices, but IBM cut losses on the business in half. -- Another contributor to revenue decline was its decision to exit the network hardware business, which declined more than 60 percent in revenue. Last fall, IBM agreed to sell parts of that business to partner Cisco Systems Inc. (NasdaqNM:CSCO - news). COMPUTER HARDWARE SYSTEM 390 MAINFRAMES -- said sales of IBM's flagship mainframe computer systems, known as System 390, declined 28 percent, amid the slowdown in computer sales tied to the Year 2000 transition. -- still, sales of ``MIPS,' a basic measurement of customer demand for mainframe computing capacity, grew roughly 35 to 40 percent. -- the excess mainframe capacity sold to customers in recent years for testing Year 2000 software repair work has mostly been absorbed, clearing the way for new mainframe sales, he said. MINICOMPUTERS -- AS/400 is IBM's line of minicomputers for running mid-sized business operations. It is frequently one its most troubled hardware lines, but picked up the pace in the first quarter, growing 5 percent. UNIX -- sales of its S80 high-end Unix enterprise servers grew 33 percent. Later this quarter, the rest of its Unix server family will be upgraded to run on IBM's advanced copper-based computer chip technology, which has fuelled the S80's performance. PCs -- Commercial desktop PC sales were off 30 percent. Total personal systems revenue fell nearly $500 million year to year. IBM GLOBAL SERVICES DIVISION -- Global Services division revenues were flat at $7.6 billion, but accounted for 39 percent of IBM's total first-quarter revenue of $19.3 billion. Excluding the impact from the Year 2000 slowdown, Joyce estimated services work grew 10 percent. -- ``outsourcing' projects, where IBM manages computers on behalf of corporate customers, accounted for 40 percent of Global Services division revenue. More than half of the $8.6 billion in new services contract signed during the first-quarter were for this so-called ``strategic outsourcing.' -- said IBM was on track for record services contract signings in the second quarter. SOFTWARE DIVISION -- software revenue was little changed at $2.9 billion. He said some contracts had slipped from the first quarter into the second quarter for its Tivoli software business, which sells software used to manage large organisation's computer systems. -- ``Tivoli got off to slow start after a strong fourth quarter, but we expect them to get off to a quick start in the second quarter,' he said. -- middleware software business, which represents three-quarter of IBM's non-mainframe software sales that companies use to retrofit older computer systems to make them Internet-ready, grew 9 percent. -- Offsetting this was a 16 percent decline in mainframe host software, reflecting the Y2K transition. -- revenue from its Lotus software business, the industry's most widely used office information-sharing system, grew more than 13 percent in the quarter. OUTLOOK -- Joyce said the company was using the current transitional period to shift IBM toward becoming more of an e-business, practicing what it preaches in its widespread corporate advertising campaign. -- ``We will be reshaping IBM into a fundamentally different enterprise. Our focus is in meeting our customer demands for e -biz solutions and that demand is greater than ever,' he said.