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: jtechkid who wrote (2857)	4/20/1998 9:12:00 PM
From: art slott	Read Replies (1) \| Respond to of 8218

I don't know about you but I have watched many companies pre announceing still give even far worse results than expected. Read this, because you missed the growth in software, mid range servers, disc drives, semiconductors, etc. What were you reading? Investor News IBM's First Quarter Comes Out Ahead Of Estimates (04/20/98; 5:25 p.m. ET) By Gabrielle Jonas, TechInvestor IBM reported Monday first quarter earnings of $1.04 billion, or $1.06 a share, down from a year ago, but ahead of Wall Street estimates. Wall Street was looking for earnings of $1.05 a share. IBM's [IBM] shares moved higher in aftermarket trading. The company's first quarter results compare with earnings of $1.19 billion, or $1.16 a share, in the same quarter a year ago. Revenue was up slightly to $17.6 billion, compared with $17.3 billion a year ago. Wall Street had expected a tough first quarter following IBM's fourth quarter earnings announcement. IBM in January said marketing and acquisition costs, as well as price pressures, would hurt first quarter results. That prediction in January left few surprises in the first quarter. The company said hardware sales were hurt by Asia's financial problems. Increased marketing expenses related to the Olympics also cut into the bottom line. "The balance sheet remains very healthy," said Lawrence R. Ricciardi, chief financial officer, in a conference call. "Our competitive position continues to improve. Asia-pacific is still very tough though at this point it does not appear to be eroding further." While IBM's earnings were hurt by the price war, Asia, and increased expenses, Big Blue's no-PC businesses were a bright spot. Services, software, midrange servers, and original equipment manufacturers (OEMs) all had a strong quarter, the company said. Service sales were up 22 percent, but officials said that trend will not continue. Revenue from North America totaled $8.3 billion, up 4 percent compared with the first quarter a year ago. Revenue from Europe, the Middle East, and Africa increased 2 percent to $5.4 billion. Asia-Pacific revenue was $3.2 billion, down 6 percent. Sales from Latin America totaled $741 million, up 6 percent. The company (company profile) said currency fluctuations shaved about 12 cents a share from earnings. Total hardware sales added up to $7.1 billion in the first quarter, down from the first quarter of last year. IBM blamed weakness in PCs. AS/400 revenue increased, and RS/6000 revenues were flat. System/390 revenue declined as a result of year-over-year price reductions and ongoing product transitions, IBM said, while shipments of System/390 computing power grew about 45 percent. Storage product revenue increased, with continued strength in OEM sales of hard disk drives. Semiconductor revenue grew significantly despite the declines in memory chip prices in the quarter. Software sales were up 2 percent to $3 billion, and IBM shipped 2.7 million Lotus Notes seats. IBM's overall gross profit margin was 36.6 percent in the first quarter compared with 38.1 percent a year ago. In the first quarter, gross margin improvement in services and software was offset by declines in hardware and rentals as well as financing margins. Although IBM had bright spots in the quarter, Ricciardi was elusive when it came to giving an outlook for the second quarter. "The story for the first quarter is really the portfolio story and the strength of our non PC business which enabled us to absorb the terrible PC environment," said Ricciardi. "We will continue to see that environment extending into the second quarter. We're certainly going to see pricing pressures through the second quarter as everyone addresses channel inventory so second quarter pricing pressures certainly that will be with us." "My crystal ball doesn't take me beyond that," he said. Related Stories: Xerox Hires Away IBM CFO