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

To: Robert Scott Diver who wrote (7001)	12/6/2000 12:44:18 PM
From: John Koligman	Respond to of 8218

I thought of IBM when I read this article in today's WSJ. Lou has been quite an adroit financial engineer, pumping up EPS with little growth, and as I recall the pension was part of this. It will be interesting to see if this starts moving 'in reverse', not just for IBM but for many other firms. Regards, John Northrop Grumman Warns Income From Pension Funds Will Decline By ANNE MARIE SQUEO and JEFF COLE Staff Reporters of THE WALL STREET JOURNAL Northrop Grumman Corp., which has prospered because of pension-fund investments in the past, warned that reduced income from those investments this year could knock $50 million, or 45 cents a share, from analysts' projections of at least $656 million, or $9.15 a share, in 2001 earnings. During a conference call Tuesday, Richard Waugh, chief financial officer of the Los Angeles-based aerospace concern, said such a shortfall wasn't yet certain. He said pension investment gains in the last two months of this year "can have a significant impact" in offsetting any potential earnings decline. He also noted that anticipated operating gains from the company's defense electronics, information services or other businesses could make up for any pension shortfall. Typically, Northrop records pension fund gains in the subsequent year's earnings. Northrop's pension-related announcements came after the afternoon close of trading on the New York Stock Exchange. In Big Board composite trading at 4 p.m. Tuesday, Northrop's shares rose $2.56 to $85. Strong stock-market conditions in recent years have boosted the pension-fund proceeds for Northrop, which has been getting about half its earnings from that source. Stock-market declines in recent months account for the Northrop warning. The reliance on pension-fund returns makes the company unusual within the aerospace and defense industry, although companies in other industries like financial services have become more aggressive about booking pension-fund gains to their bottom lines in recent years. "We are a very, very healthy company," said Mr. Waugh, explaining that, excluding the pension income, the company's earnings are expected to increase by 15% or more. About 75% of Northrop's pension assets are invested in equities, with the rest in fixed-income securities. Mr. Waugh also said cash flow from operations for the year 2000 could reach $700 million, about $100 million more than had been expected earlier. The company said that average annual cash flow would be about $400 million to $500 million during the next few years. That projection excludes the effect of an enormous tax payment relating to production of the B-2 bomber that is due in 2002. Northrop Grumman projects overall revenue would increase from $9 billion next year to between $10.5 billion and $11 billion by the end of 2003.

To: Robert Scott Diver who wrote (7001)	12/7/2000 9:31:06 AM
From: art slott	Read Replies (1) \| Respond to of 8218

IBM scores memory breakthrough By Duncan Martell, ZDNet News MRAM uses magnetic rather than electrical power to store data bits. Imagine not having to wait for your computer to boot up. SAN FRANCISCO -- IBM Corp. is taking its latest research product out of the lab and onto the market with a new memory technology that, if successful, could change the industry. Called magnetic random-access memory, or MRAM, it uses magnetic rather than electrical charges to store data bits. Because the chips use magnetism to store data, electrical power isn't required for them to retain that data, unlike current dynamic random-access memory and synchronous random-access memory chips that are the standard. • Linux looms large at IBM • Free Tech Tips and Help • The Best Palm Pilot Software • Free MP3 Music Resources IBM and Munich-based Infineon Technologies AG (NYSE:IFX - news), a memory chipmaker, announced plans to move MRAM into commercial production on Thursday. While these changes may seem arcane and even incremental, the possibilities loom large: How about not waiting a minute or more for your personal computer or laptop to boot up? With MRAM, ''instant-on'' computing becomes possible -- making it much more like a television or radio. From computers to cell phones to game systems, MRAM has the potential to store more information, access it faster and use less power. ``Anybody who brings all of the things that this promises to the market at a reasonable cost is going to win hands down,'' said analyst Jim Handy of research firm Dataquest. In development since 1974 Bijan Davari, head of IBM's technology and emerging products in the company's microelectronics division said that Big Blue has been working on magnetic memory technology since 1974 but added that the challenge so far has been to refine the technology so that the actual memory chips would be small enough to be cost-effective. ``Potentially this could change the memory business very, very dramatically,'' Davari said. ``But the key word is 'potentially.''' While IBM and Infineon have proved MRAM can work, they now are turning to the considerable challenge of getting the chip into development and being able to churn out large numbers of them at a reasonable cost to customers. The chips work by storing the ones and zeros that comprise digital data in a magnetic material that is sandwiched between two metal layers. ``You pass the current through and store either a one or a zero at that sandwich by switching its polarity,'' Davari said. In production by 2004 There will be some test versions out in 2003, but IBM, which will make the chips at its own plants, doesn't expect volume production until sometime in 2004, Davari said. ``IBM has never failed to execute on any of the technology and manufacturing efforts in the past three to four years that they've undertaken,'' said Richard Doherty, director of research at Envisioneering Group, Seaford, N.Y. Still, for the MRAM chips to trickle down into the mainstream and drop sufficiently in price to make them widespread, that will take time, Handy said, estimating a figure of about 10 years. MRAM could also potentially compete with current flash memory chips that don't lose their data when power to them is cut off. ``The biggest question of any of these new technologies is how soon will they go mainstream and be cost-effective,'' Handy said. Among other benefits of the MRAM technology: in the powerful computer servers that help run the Web it could mean faster surfing and easier downloads; in cell phones it could enable wireless video and more accurate speech recognition; and in mobile digital players such as MP3 devices, users could store and watch thousands of songs and movies. Initially, each of the chips will accommodate 256 megabytes of data and more with successive generations, Davari said, declining to comment on initial volumes and prices. Email this story - View most popular \| Printer-friendly format