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To: Johnny Canuck who wrote (42727)	10/18/2005 2:25:36 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69262

IBM net dips but services solid By Reuters news.com.com Story last modified Mon Oct 17 13:35:00 PDT 2005 IBM, the world's largest computer company, on Monday posted a dip in quarterly net profit, but topped Wall Street expectations as its consulting and services business rebounded for a second straight quarter. Third-quarter net income dipped to $1.52 billion, or 94 cents per share, from a restated $1.55 billion, or 92 cents per share, in the year-earlier period, IBM said in a statement. Excluding one-time items, IBM said it had a profit of $1.26 per share, beating analysts' average forecast of $1.13 per share, according to Reuters Estimates. Revenue at IBM fell 7.8 percent to $21.5 billion from $23.4 billion a year earlier, reflecting the sale of its PC business in May. Earlier this year, IBM suffered a slowdown in services, which accounts for about half its revenue, but the business improved as IBM began signing a series of multibillion-dollar deals. Shares of Armonk, N.Y.-based IBM have slumped 16 percent this year compared with the 2.5 percent gain of the American Stock Exchange Computer Hardware Index. The shares trade at 15 times 2006 estimated earnings, a discount to competitor Dell's 20.4 percent price-to-earnings ratio based on Friday's closing price. Hewlett-Packard also trades at 15 times 2006 projected earnings. IBM's stock has outperformed Dell, the world's biggest maker of personal computers, by 7.7 percent this year, while underperforming the Standard & Poor's 500 Index by 14 percent, based on Friday's closing prices. "IBM had a good quarter," Chairman and Chief Executive Sam Palmisano said in a statement. "It showed the strength of our business model across hardware, software and services." He added that he was "encouraged" by customer reception of IBM's recently upgraded flagship line of mainframe computers.