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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Math Junkie who wrote (534)	11/14/2001 8:34:48 PM
From: Proud_Infidel	Respond to of 25522

BRKS beats guidance: biz.yahoo.com

To: Math Junkie who wrote (534)	11/15/2001 11:17:31 AM
From: Proud_Infidel	Respond to of 25522

IBM says IT services demand still strong By Reuters November 15, 2001, 5:50 a.m. PT NEW YORK--IBM said that while demand for new technology products may be waning, its industry leading services business has picked up the slack. In a biannual meeting Wednesday with Wall Street analysts here, Chief Operating Officer Sam Palmisano said demand for outsourcing and services for the corporation's information technology is strengthening even as the economy weakens. That message conflicts with what many of Armonk-N.Y.-based IBM's rivals are saying about the tech-spending slump and indicates customers may be cutting costs by contracting out their technical needs to Big Blue amid an economic downturn. "When the dot-coms got hot and everything got excited, the propensity to look at a restructuring of your IT infrastructure lessened, but now that there's economic pressure, you see the pipeline in the Americas beginning to come back again," Palmisano said. "There is a lot of demand for services," Palmisano said. That could very well mean that the service division's more than $97 billion in orders, or backlog, is about to increase, Salomon Smith Barney analyst John Jones said. "They talked about their services pipeline, meaning business that's in process but hasn't closed yet, and kind of implied that they are going to have a couple of quarters of what could be record bookings for that business," Jones said. That is important, Jones said, because that business has driven the top line during the past few years. IBM's industry leading global services division acts as a sales force for IBM hardware and software, driving further sales of those products. Jim Hillary, an analyst for Marsico Capital Management, said he thought it could mean the company will push its outlook higher. IBM said in mid-October it was comfortable with analyst estimates for earnings of $1.34 per share. "I'd be surprised if IBM doesn't raise" its outlook guidance, Hillary said. Palmisano pointed out during the meeting that 60 percent of revenue and 75 percent of profits come from IBM's software and services division. That is a change from the company that was once known largely for its large mainframe computers. Going forward, he said, he expects services and software will continue to drive the company's earnings and revenue. IBM on Oct. 17 reported earnings of 90 cents per share, a 20 percent decline from the previous year. At that time, the company said services revenue had offset declines in hardware sales during the quarter. The strong earnings came at a time when competitors like Sun Microsystems and EMC lost money because of the retrenchment in corporate spending on technology. IBM is in a better competitive position now than it has been in recent years, analysts said, but that does not mean its competitors will not improve. "They are fundamentally in a better position for the long term. Does that mean they are going to consistently outgrow everyone else? No. Does that mean Sun is not going to make some kind of comeback? No," said Daniel Kunstler, an analyst at J.P. Morgan who attended the meeting. "It simply means they are coming out of this downturn, coming through the product cycles, they are going to be a consistently better competitor," Kunstler said.