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.

Non-Tech : Secret Squirrels hit! -- Ignore unavailable to you. Want to Upgrade?

To: ChrisJP who wrote (8170)	6/24/2002 4:36:24 PM
From: Victor Lazlo	Respond to of 12872

<<IBM didn't warn last year. Their answer -- their services business was making up for the hardware and software sales shortfall. Looks like what may have been happening is that IBM was "booking" services sales at an accelerated rate (all very legal, just slightly misleading). So last year they were able to counter the drop in hardware and software sales with future services sales. >> Hi Chris In Q4 last year IBM met its earnings est (actually beat by a penny i think) by booking the sale of a component factory to JDSU as reduction in G&A, instead of as a one-time gain, which would have been the proper way to account for it. So when they missed rev tagets for the Q but still met earnings, more people on wall street should have been asking tougher questions. When they got caught, they had to restate earnings. And now they have said their services bus is underperforming their targets. Since this is their highest-margin business unit, I don't expect much upside for the stock. Victor