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

To: Arrow Hd. who wrote (7580)	4/8/2002 6:30:48 PM
From: Michael Bakunin	Read Replies (2) \| Respond to of 8218

Au contraire; I appreciate the good post. My thoughts: IBM has missed revenue expectations more than once the last several quarters. The street's been cutting revenue estimates, so that part of the miss isn't a surprise unless you weren't paying attention and are, with apologies to Claude Rains, "shocked.. shocked!" However, the company previously had pulled on earnings levers to avoid missing EPS. If this time around they are not doing so, my guess is that it's a combination of your suggestion Palmistano wants to "lower the bar", that EPS levers may be less available than previously, and perhaps even that the company is now leery of its old practices in a post-Enron world. While it's also possible that business is just so weak that the miss is after stretching to make earnings, that'd be a worst case that I discount as unlikely. While it surprised me, IBM claimed in its 10K that, regarding SFAS 142, "An initial impairment test must be performed in 2002 as of January 1, 2002. The company completed this initial transition impairment test and determined that its goodwill is not impaired." If IBM does a material impairment writedown in any quarter this year, I'd say the stock is in for another surprise haircut. -mb