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Strategies & Market Trends : The New Economy and its Winners -- Ignore unavailable to you. Want to Upgrade?

To: fedhead who wrote (16758)	4/29/2003 3:10:56 PM
From: Bill Harmond	Read Replies (1) \| Respond to of 57684

IBM Chief Says Industry Is Poised to Resume Growth By WILLIAM M. BULKELEY Staff Reporter of THE WALL STREET JOURNAL KANSAS CITY, Mo. – International Business Machines Corp. Chief Executive Samuel Palmisano told shareholders at the company's annual meeting that he believes "this industry will resume being a growth industry." Recently Oracle Corp. CEO Larry Ellison said in an interview with The Wall Street Journal that the computer industry's days of rapid growth may be past. But Mr. Palmisano said "we believe that long-term growth can be faster than GDP," a basic definition of a growth business. He didn't give a time frame for his forecast. In his first annual meeting as chairman, he said that compared to its rivals, "IBM is gaining momentum." He also predicted that as the industry emerges from two years of world-wide contraction, "we'll be stronger relative to our competition." Mr. Palmisano said that during the past year "we fundamentally repositioned our company for long-term success." Noting that IBM had bought the PricewaterhouseCoopers consulting business and a number of software firms, while selling off its disk-drive business, he predicted that in 2003, 65% of IBM's revenue will come from software and services. He said that's up from 50% in 1998. Last year, 61% of IBM's $81.2 billion revenue came from software and services. At the meeting, shareholders defeated all shareholder motions, which had been opposed by management. However, a motion to expense stock options received a surprisingly strong 47% of the shareholder vote. Mr. Palmisano said that IBM has decided against taking a public position on how to expense options. Earlier this month, the Financial Accounting Standards Board said it will require companies to expense options, but it said it will study what method to use. Separately, IBM, based in Armonk, N.Y., raised its quarterly dividend to shareholders to 16 cents a share from 15 cents. The new dividend is payable June 10, to shareholders on record as of May 9. In afternoon trading Tuesday on the New York Stock Exchange, IBM shares were up 34 cents at $85.46. Write to William M. Bulkeley at bill.bulkeley@wsj.com