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: art slott who wrote (3303)	6/17/1998 5:16:00 PM
From: wiley murray	Read Replies (1) \| Respond to of 8218

Art: Good points for a bullish outlook.The Asian crisis is not over for IBM and other companies doing business in Asia. Time will tell.

To: art slott who wrote (3303)	6/17/1998 7:06:00 PM
From: Arrow Hd.	Read Replies (3) \| Respond to of 8218

Art, can you quantify what the other analysts were saying. I heard a quote from George Elling that he thought the next few quarters would not see any dramatic improvements but Gerstner told these guys not to change their models now and the double digit growth is really a 1999 and beyond projection. The fact that he said not to change their models indicates to me that he believes he can make the numbers. I have heard no indication that IR did any whispering to the street. I think this is their own tinkering with their proprietary models adjusting due to Asia, currencies, and so on. Also, it is dangerous for an analyst to make judgements by talking with contacts within singular divisions for a number of reasons. One, it is only one part of the pie but less obvious is that IBM internal objectives are based upon numbers that are not always reflective on EPS. For instance, sales organizations have quotas that are always uplifted. Last year in one quarter the North American sales areas virtually missed all of their quotas but NA reported numbers that exceeded what they had committed to Corporate. How is this possible? Overassigning quotas so you drive harder which also means that on the surface it appears there is a miss but on a consolidation of the base number it is a make and Corporate is whole. SGA is another number that gets fudged in the equation. I know that some divisions still assign out SGA numbers in the 30s. It hasnt been 30 since the downsizing bloodbath of a few years ago so the delta goes to the bottom line. So if you are an analyst and are probing around talking to contacts you could come away with a dismal view of things but around comes earnings and its another meets or exceeds. Now if IR is talking the street down or we have an early warning like we did last January then that is a different story. But you only need one berserk turkey to send the hen house into mayhem and right, wrong or indifferent it affects the stock. If other analysts are not following suit in the next few days then I would speculate Milunovich went out on a limb on his own. He needs a home run since he was run out of Dean Witter in deference to Morgan Stanley's George Kelly so this may be a good time to try and take a chance with a leadership call. I dont know. I go back to an earlier post where I felt IBM would take it in the neck due to 2% revenue gains but it didnt setting a new high instead. So this is too hard to call on where it is going. I see another low single digit revenue quarter but I see them making the EPS whatever the new analyst numbers become and maybe even the old number just to send a message. I believe that the bottom line is being managed ok. Business is tough but numbers are being made. There is still price attrition but there are a lot of positive areas too. The mainframe preview in May will be formalized in the July time frame and I think we will see some very encouraging signs. G5 is a very powerful system.