- GOP hopes taking shutdown off the table with budget deal will pay dividends
- Chinese Death Star: The moon cited as the perfect launch pad for ballistic missiles
- Help wanted: Homeland Security plagued by vacancies at the top
- We are not amused: Queen’s protection officers warned to keep ‘sticky fingers’ off the royal cashews
- Unleash the crossbows: Gov. Scott Walker creates new hunting season
- Bubonic plague kills 20 in Madagascar
- G-20 diplomats fell for hacker attack promising nude photos of former French first lady Carla Bruni
- Minnesota guardsman charged with stealing private soldier data for fake IDs
- Florida appeals court rules universities can’t regulate guns
- Vladimir Putin defends Russian conservative values
IBM’s 3Q earnings flat, revenue slides 5 percent
SAN FRANCISCO (AP) - IBM’s revenue slipped below Wall Street’s expectations in the third quarter as the technology company dealt with jittery customers and a weakening euro that undercut its results. Despite the problems posed by the wobbly economy, IBM’s earnings held steady.
Much of revenue shortfall was blamed on the economic deterioration in Europe and other parts of the world. That has resulted in weakened international currencies, translating into fewer dollars on sales made abroad.
IBM management also raised the specter of slowing demand for the company’s technology-consulting services and business-software products as corporate customers become more cautious and debt-laden government agencies deal with budget cuts.
After a solid start to the third quarter, business became “more challenging” in September, Chief Financial Officer Mark Loughridge told analysts during a conference call Tuesday to discuss the quarterly earnings report.
IBM Corp. signaled its belief that its business will hold up by standing behind its previous earnings forecast for the full year.
Investors, though, seemed a little worried. IBM shares shed $7.30, or 3.5 percent, to $203.70 in extended trading after the third-quarter numbers came out.
IBM, which is based in Armonk, N.Y., is considered a good gauge of technology demand because it sells to major companies and governments throughout the world. It also boasts a nearly decade-long record of uninterrupted prosperity. The latest three-month period marks the 39th consecutive quarter in which IBM’s earnings per share was higher than the previous year.
The company has been able to thrive because it locks many of its customers into contracts that guarantee regular payments even in tough economic times.
Even so, IBM isn’t completely insulated from economic downturns. That was in evident during the third quarter in Europe, where massive government deficits in several countries are hurting the continent’s economy. IBM’s revenue in its region that includes Europe declined 9 percent from the same time last year, more than any other part of the world.
The weaker euro contributed to the erosion. That’s because sales made in Europe are converting into fewer U.S. dollars than a year ago.
IBM earned $3.8 billion, or $3.33 per share, in the July-September period. The company delivered the same net income a year ago, but its per-share earnings were 14 cents lower in the 2011 quarter because the company had more outstanding stock then.
This year’s results included a last-minute $160 million charge that the technology services and business software company absorbed for a U.K. court decision that will increase its costs for paying pensions to some of its retired employees. The adverse court decision came at the end of last week.
If not for the costs of past acquisitions and retirement charges, IBM said it would have earned $3.62 per share. On that basis, IBM’s latest earnings were a penny above the average estimate among analysts polled by FactSet. The adjusted earnings of $4.2 billion represented a 5 percent increase from the same period last year.
Revenue for the quarter fell 5 percent from the same time last year to $24.7 billion. That figure was about $700 million below the average estimate of analysts surveyed by FactSet.
Analysts had factored the strengthening dollar into their projections, but apparently underestimated the impact.
By Matt Kibbe
The short-term deal will assure long-term overspending
- Obama's Afghanistan experts stumped on U.S. death toll, war costs during hearing
- NAPOLITANO: A conspiracy so vast
- House pushes through two-year Ryan-Murray budget deal
- Comma on!: Twitter erupts over Obama-Castro 'marriage'
- Jane Fonda Foundation fails to make single contribution in 5 years: report
- All-out war breaks out in GOP over budget pact
- White House improvises again on patchy Obamacare rollout
- U.S. pilot scares off Iranians with 'Top Gun'-worthy stunt: 'You really ought to go home'
- Obama takes 'selfie' at Mandela's funeral service
- CARSON: Why did the founders give us the Second Amendment?
Independent voices from the The Washington Times Communities
Born in 1930 in rural Missouri, Charles Vandegriffe, Sr., brings his time and place to the Communities.
Columns from Voices around the World talking about the events, people, politics and social issues that concern us wherever, and whoever, we are.
Chef Mary Moran discusses the food we eat, where it comes from and what it does for us.
An informed and often humorous take on the world of advertising, public relations and social media. 100% Pure. Not from concentrate.
Extraordinary day at Redskins Park
White House pets gone wild!
Let it snow