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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era -- Ignore unavailable to you. Want to Upgrade?

To: Freedom Fighter who wrote (1125)	1/21/1999 7:24:00 PM
From: porcupine --''''>	Read Replies (1) \| Respond to of 1722

IBM Posts Better-Than-Expected 4th Quarter Profit ARMONK, N.Y. (Reuters) - International Business Machines Corp. Thursday reported better-than-expected earnings for the fourth quarter, paced by continued strong growth in services and software and helped by the weaker dollar. The world's largest computer maker said net earnings rose to $2.3 billion, or $2.47 a diluted share, from $2.1 billion, or $2.11 a share, a year earlier. Wall Street analysts had forecast profit of $2.45 a share on average, according to First Call Corp., which tracks estimates. Almost 60 percent gross profits come from software and its fast-growing services business, extending an ongoing shift at IBM away from hardware as the main source of business. ''We showed particular strength in services and software -- two areas of critical importance as our customers increasingly embrace e-business and network computing,'' Chairman Louis Gerstner said in a statement. Total sales rose 6 percent to $25.1 billion with 1 point of the gain coming from currency fluctuations, a reversal from recent quarters in which IBM's results have been hurt by a strong dollar, which tends to erode the value of sales overseas. While total sales rose, some analysts had expected even stronger revenue growth. Total hardware sales fell 2 percent to $11.3 billion, services revenues jumped 20 percent to $7.1 billion and software sales grew 9 percent to $4.1 billion, IBM said. The increase in earnings came despite continued weakness in Asia and Latin America, continued weak prices for computer memory chips and weakness in its sales of server computers that link together computer networks, the company said. Sales in North America rose 8 percent to $11.3 billion in the quarter and 13 percent to $8.7 billion in Europe, the Middle East and Africa. But sales edged down 3 percent to $4.2 billion in the Asia-Pacific region and tumbled 22 percent to $929 million in Latin America. IBM continued to fuel earnings per share growth through share repurchases, buying back $1.6 billion in stock during the fourth quarter. As a result, the company's earnings per share on a diluted basis rose 17.1 percent in the quarter, compared with a 12.1 percent rise in net income. IBM's stock rose $2.875 to close at $197.06 on the New York Stock Exchange. Copyright © 1999 Reuters Limited. All rights reserved.