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

To: porcupine --''''> who wrote (1587)	4/21/1999 11:45:00 PM
From: porcupine --''''>	Read Replies (2) \| Respond to of 1722

Big Blue Blasts Past Street Estimates on Earnings and Revenues --!!!!> "FOCUS-IBM earns $1.5 billion in first quarter" ARMONK, N.Y., April 21 (Reuters) - International Business Machines Corp. (IBM - news), the world's largest computer maker, said on Wednesday its first-quarter income jumped 50 percent to $1.5 billion, exceeding Wall Street's estimates, on a 15 percent increase in revenue. However, In a conference call with Wall Street analysts Doug Maine, IBM's chief financial officer cautioned: ''It would be premature to come to any conclusions about the remainder of the year.'' He cited pricing pressures in some business segments, uncertainty about recovery of some world geographic regions and possible customer delays in buying new computers in order to fix Year 2000 software glitches in existing equipment. But in response to an analyst's question about what, if any, evidence IBM had seen that Year 2000 concerns might lead to a further, unexpected slowdown in computer spending in 1999, Maine sought to combat the fear of the unknown. ''There's an absence of anything we're hearing from customers that suggests a slowdown,'' he said. IBM stock took flight and soared in after-hours trading, gaining more than $17.50 to trade at $189.37, adding to a gain of $2.12 during the regular session. The company said its result meant income of $1.55 a share came on sales of $20.3 billion. Wall Street analysts surveyed by First Call Corp. had expected IBM to earn $1.41 a share. IBM said its net income, income per share and revenues were all records for the first quarter. In the year-earlier period, IBM earned $1 billion, or $1.06 a share, on sales of $17.6 billion. The company said sales in the Americas increased 13 percent to $8.8 billion; in Europe, the Middle East and Africa 20 percent to $6.3 billion; and in the Asia-Pacific region 20 percent to $3.5 billion. Hardware sales were up 17 percent, services were up 19 percent and software up 10 percent, IBM said. The company's gross margin declined slightly, to 35.7 percent from 36.6 percent. ''My initial feel is this is a solid, solid quarter,'' said Phil Orlando, chief investment officer with Value Line Asset Management. ''The slight decline in gross margins was a modest disappointment, but the bottom line is the bottom line and they beat the number there by 14 cents,'' he said. Chairman Louis V. Gerstner Jr. noted that the technology group results were mixed, with improvement in its personal computer and disk drive divisions, but weaker results in its memory chip unit. Gerstner also said computer services and software accounted for 60 percent of the company's gross profit. ''Services is clearly the largest and fastest growing portion of the information technology industry, and we continue to extend our leadership position each quarter,'' Gerstner said. The results were released after the close of regular stock trading. IBM's stock closed at $171.875 a share, up $2.125, on the New York Stock Exchange. The company said during the quarter it increased its common stock repurchases to $2.1 billion from $1.6 billion in the fourth quarter of 1998.