IBM meets expectations in Q3

IBM Corp. on Tuesday announced its third quarter earnings, which rose 20 percent from the same time last year and kept pace with analysts’ projections.

IBM posted earnings of US$1.08 per diluted share mirroring what 18 analysts polled by First Call/Thomson Financial, said Joe Cooper, a research analyst at the Boston-based financial firm. This was 15 cents more than the 93 cents per diluted share posted in the third quarter of 1999.

Third quarter net-income totaled $2 billion compared to $1.8 billion in 1999. Third quarter revenue grew 3 percent to $21.8 billion. Six analysts surveyed by First Call anticipated revenues of $22.4 billion, Cooper said.

Louis V. Gerstner, IBM’s chairman and chief executive officer, said in a statement that the company posted a solid quarter with the earnings per share up 20 percent and an acceleration of revenue growth. However, he also stated the Armonk, New York-based company would have liked to have seen more revenue in the quarter, but were held back by three items.

Demand for microelectronics products outstripped the company’s ability to supply components, Gerstner said. Second, the pending release of IBM’s high-end server slowed demand for the S/390 family of servers, he said. And finally, he said parts of the company’s software business slowed “unexpectedly” during September.

Software revenues declined 3 percent during the third quarter because of sales execution issues late in the quarter, the company said. Hardware revenues were $9.5 billion an increase of 4 percent from the same time last year. But AS/400 revenue declined due to supply shortages and S/390 revenues fell as a result of pending release of a new high-end server, the company said.

IBM is projected to earn $1.48 per diluted share and post revenues of $26.6 billion during the fourth quarter, Cooper said. For the year, IBM is expected to earn $4.45 per diluted share, he said. The outlook for 2001 is for the company to earn $5.04 per diluted share, he said.

IBM, in Armonk, New York, can be reached at