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

To: Lizzie Tudor who wrote (47780)	1/20/2009 4:47:09 PM
From: Lizzie Tudor	Read Replies (4) \| Respond to of 57684

Roubini: U.S. Banking System Insolvent, Another $2.5T of Losses Coming finance.yahoo.com

To: Lizzie Tudor who wrote (47780)	1/20/2009 4:53:08 PM
From: stockman_scott	Read Replies (1) \| Respond to of 57684

IBM Profit Climbs 12%; Forecast Exceeds Estimates (Update1) By Katie Hoffmann Jan. 20 (Bloomberg) -- International Business Machines Corp., the world’s biggest computer-services company, posted profit and released a forecast that topped analysts’ estimates, sending the shares higher in late trading. The stock climbed 4 percent after IBM posted fourth-quarter earnings of $3.28 a share, exceeding the $3.02 average of estimates compiled by Bloomberg. Profit this year will climb to at least $9.20 a share, also beating projections. IBM squeezed out a profit increase even as sales fell in all units save the software division. IBM’s strategy of focusing on more profitable businesses, such as software, helped the company overcome “an extremely difficult economic environment,” Chief Executive Officer Samuel Palmisano said today in a statement. “They’re being opportunistic,” said New York-based UBS analyst Maynard Um, who has a “neutral” rating on the stock and doesn’t own it. “I continue to be surprised as to how they can grow” software sales. IBM, based in Armonk, New York, rose $3.35 to $85.33 in extended trading after closing at $81.98 on the New York Stock Exchange. The stock has dropped 21 percent in the past year. Net income climbed to $4.43 billion from $3.95 billion, or $2.80 a share, a year earlier, IBM said in the statement. Total sales fell 6.4 percent to $27 billion, compared with the $28.2 billion average of estimates compiled by Bloomberg. Revenue in the software unit climbed 2.6 percent to $6.42 billion. IBM has spent more than $5 billion in the past year on acquisitions to bolster its software unit, the company’s most profitable business. Gross margin, or the percentage of sales left after production costs, widened to 87.7 percent from 87.1 percent a year ago. Corporate Earnings IBM bought at least six software companies last year, adding new products to take on larger Microsoft Corp. The biggest of those was the purchase of Cognos Inc. for $4.9 billion, giving IBM programs that track corporate performance. Corporate earnings have slumped as the first simultaneous recessions in the U.S., Japan and Europe since World War II tighten credit markets and curb spending. This month Intel Corp., the world’s largest chipmaker, said profit in the fourth quarter fell 90 percent as demand for computers ebbed. Sales of computer services, which account for more than half of total revenue, fell 4 percent to $14.3 billion. The company is trying to woo users away from Microsoft programs by offering its Lotus Notes software for free, making money instead from related technology and services. It adapted the software for use with Apple Inc.’s Macintosh computers and the Linux operating system in November. To contact the reporter on this story: Katie Hoffmann in New York at khoffmann4@bloomberg.net Last Updated: January 20, 2009 16:33 EST