IBM shares sink as analysts cut 1992 estimates: stock falls 4.4% after firm paints cautious outlook due to weak economy

Article Abstract:

IBM shares fell 4.4. percent after IBM announced its 1992 profit estimates and the effects of the weak economy on business. The company projects revenue growth at just 6 percent in 1992, which is less than other analysts had predicted. That figure would put IBM's revenues at $69 billion, a number that resembles the company's 1990 earnings. The recession and heavy competition have hit the company hard, forcing re-evaluations of gross profit margin and employment management. IBM's gross profit margin in 1992 may hold at 51 or 53 percent, and research and development will be maintained at a flat growth rate. About 20,000 jobs will be cut, which means the workforce will be about 330,000. The company still counts on sustained growth and revenue from the AS/400 minicomputer and RS/6000 workstation. Personal computer revenues are expected to drop by 10 percent, to $9 billion, with a loss of two percentage points of market share.

Office machines, not elsewhere classified, Management, Statistics, Forecasting, Market share, Financial Analysis Software, Profit Margin, Stock, Work Force Reduction

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IBM's profit advanced 5.2% in 2nd period; solid results boosts stocks; problems may be ahead as mainframe sales fell

Article Abstract:

IBM reported its first respectable back-to-back quarters since the mid 1980s with a 5.2 percent increase in 2nd qtr earnings for 1990. IBM is expected to announce the next generation of mainframe computers in Sep or Oct 1990 and some analysts blame the decrease in mainframe sales for the period on anticipation of the new line. IBM exceeded analysts expectations for the 2nd qtr 1990 and reported a net income of $1.41 billion, or $2.45 a share. Analysts estimated income to be between $2.25 and $2.35 a share. The company earned $1.34 billion, or $2.31 a share, for the same period in 1989. Revenue rose at 8.4 percent to $16.5 billion from $15.21 billion in the same period in 1989. IBM stock closed at $122.375 a share, up $1.375 a share, on Jul 16, 1990.

Product development, Profits, Mainframe computers, Revenue, Mainframe Computer, Computer Industry, Profit, Second Quarter

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