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: Arrow Hd. who wrote (7657)	5/15/2002 5:50:26 PM
From: Arrow Hd.	Read Replies (1) \| Respond to of 8218

The IBM Securities Analysts Conference Call just ended. One of the most frustrating events I have ever tried to listen to. The sound on one link was poor so I switched to Real Player which was worse. It broke up the sound, cut me off, cut me off again, then somehow I lost my cable modem, switched to AOL, got cut off again, back to the other link and finally heard the last part and the Q&A. All of that for a CC that was fair to poor. The focus was on long term strategy and emphasized that all the short term outlook was covered by John Joyce (CFO) in the earnings CC. So no new news. Palmisano had his entire executive team there for Q&A and the reception. Hopefully, there was some smoozing afterwards. The presentations were stilted with efforts of humor that bombed and in the Q&A a few faux pas' by Herve Park (IR Director)when he noted that he did not see Laura Conigliaro (Goldman Sachs) at the microphone because "apparantly she has lost some weight". Mild applause that indicated the analysts were not that impressed. Focus was on the following: --Productivity: IBM sells this solution and uses it internally. --Share: IBM is gaining share and is share leader in many IT sectors. --R&D: IBM is investing in the future. --Top line growth: Hard to grow when you are selling off businesses that contribute to revenue but must do this to have profitable businesses and margin growth. Actually the answer was not this clear but that is what he meant to say. --Economy: IT investment contracted, industry over-built inventory, need things to turn around. In other words, we will grow with the industry as best we can. --?????: I missed at least 15 minutes in the middle. Q&A Most of the questions were focused on top line growth. The answers were a repeat of what was in the presentation but they rambled causing me to lose interest. Gary Helmig offered that maybe IBM needs to sell off any business that is not going to be strategic over the next five years right now and start over with a new revenue bar that can be grown at double digit top line. Continue with the E/R focus, productivity improvements and head-count adjustments to manage EPS right now as this transition occurs. The answer was uninspiring and I forget what it was. Tony Sac******* from Sanford Bernstein wanted to know why head-count was not coming down by 20K since this is what is needed to make the financial model work. The answer was on a macro basis this may be true but individually each business segment has a different model and you can't cut quantitatively across the board. This answer is correct but the real answer is you do what Gary Helmig suggested and the head-count issue is taken care of as part of the restructuring as you sell off the marginal businesses. Steve Milunovich asked whether IBM should innovate or bifurcate. Sam didn't know what bifurcate meant and neither do I so I have no idea how the rambling answer given fits into Milunovich's question but I am sure it will be revealed tomorrow on CNBC when Maria interviews Steve for his thoughts on the IBM conference. Thats about it, all IMHO of course to the best of my ability. I didn't hear anything that would move the stock price either way other than the fact there may be some disappointment with the lack of any visibility statement or short term encouragement. We'll see tomorrow.