IBM's 4th-quarter deficit hits a record $5.46 billion: operating loss of $45 million is the company's first; outlook remains poor

Article Abstract:

IBM posts a 4th qtr FY 1992 loss of $5.46 billion, or $9.57 per share, on revenue of $19.56 billion. The operating loss was $45 million, or 8 cents per share. In 4th qtr 1991, IBM lost $1.46 billion, or $2.55 per share, on revenue of $21.97 billion. Analysts are particularly concerned about faltering sales of IBM's important minicomputer line in the fourth quarter. Mainframe sales fell even faster than expected, and microcomputers continued to post a loss, even though unit sales rose 50 percent. IBM stock fell $1.125 to $48.375 on Jan 19, 1993, after the financial results were reported. For all of 1992, IBM lost $4.97 billion, or $8.70 per share, on $64.52 billion in revenue. The corporation took pretax restructuring charges of $11.6 billion for the year to cover work-force cuts and capacity reductions.

Prepackaged software, Outlook, Losses, Fourth Quarter

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IBM to record large charge for new rule

Article Abstract:

IBM adopts a new accounting rule that will lead to a first-quarter charge of $2.3 billion, or $4 a share. The charge, which is associated with IBM employee post-retirement health benefits, comes at a time when the company is cutting world-wide employment by 10,000. Previous work force reductions had focused only on US operations. Although the accounting rule will not effect the company's operating results, it will lead to IBM's first quarterly loss. Analysts dismiss the loss as meaningless because the new rule, initiated by the Financial Accounting Standards Board in December of 1990, will eventually have to also be implemented by every company. The work force reduction will be accomplished by product-line divestment, early retirement schemes, and incentives to non-retirement age employees to leave.

Office machines, not elsewhere classified, Methods, Accounting, Strategic Planning, Benefit Management, Work Force Reduction

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