IBM and Microsoft CFOs differ on 2002 outlook

IBM and Microsoft CFOs differ on 2002 outlook

IBM's chief financial officer says prospects for growth in 2002 remain 'good', but his counterpart at software giant Microsoft expects global PC sales to drop in the first half of the year.

John Joyce, IBM’s finance chief, said the underlying dynamics pointed to good growth in 2002 and called the average estimate of analysts for 2002 ‘reasonable’.

He said IBM had cut costs and should be able to improve results in its PC division, regardless of the economy. He also said the company’s customers remained cautious.

Joyce also said expected charges for write-downs in goodwill, pension costs, and equity holdings would not have a significant impact on 2002 earnings.

IBM’s net income was $2.33bn for the quarter ended 31 December, or $1.33 a share, down from $2.67bn, or $1.48 a share, a year earlier. Wall Street had expected $1.32 a share, according to analysts at First Call.

While sales declined, Joyce said IBM was able to meet its profit forecast in the recent quarter because products with high profit margins, including mainframes and software, performed beyond expectations.

But, Microsoft CFO John Connors said the company expected global PC sales to drop this quarter and next, compared with a previous forecast for shipments to rise.

He said Microsoft has not seen a rebound in any of the world’s major markets and poor PC sales in Japan were hurting demand for software.

‘PC demand is still below what we had hoped,’ Connors said. ‘When there is a recovery, it will be modest.’

Microsoft reported lower fiscal second-quarter net income and said sales this quarter would miss analyst targets because PC shipments are likely to fall.

Net income in the second quarter ended 31 December declined 13% to $2.28bn, or 41 cents a share, from $2.62bn, or 47 cents, a year earlier, excluding $660m in costs related to a planned settlement of a class-action lawsuit.

Without the legal charge, Microsoft profits would have been up 8% over the year-earlier period.

Revenues for the second quarter jumped 18 per cent to $7.74bn, compared with the $7.3bn project on average by analysts.

Connors warned investors not to get overly excited about the quarter’s sales increase. ‘While we are pleased with our results this quarter, we are concerned about the health of the global economy and have yet to see a recovery in many of the world’s largest markets.’

Whitepaper

The Future of Finance is in the CFO's Hands

Business The Future of Finance is in the CFO's Hands

2m
Save a Week a Month Consolidating Accounts

Accounting Software Save a Week a Month Consolidating Accounts

3m
Mitigating Risk Through Internal Control

Legal Mitigating Risk Through Internal Control

4m
Could tax season have run more efficiently?

Corporate Tax Could tax season have run more efficiently?

4m

Related Articles

Williams Lea appoints new global chief financial officer

Career Williams Lea appoints new global chief financial officer

2d Dave Beach
Deloitte appoints first female Managing Partner for Consulting

Big Four Deloitte appoints first female Managing Partner for Consulting

2d Dave Beach
Mazars acquires healthcare company Hall Liddy

Company News Mazars acquires healthcare company Hall Liddy

5d Dave Beach
HP and Autonomy - The use of evidence in and from foreign proceedings

Company News HP and Autonomy - The use of evidence in and from foreign proceedings

6d Charles Pugh and Edmond Fung
HW Fisher announce Compliance on Demand acquisition while Price Bailey partner with Ashtons Legal

Company News HW Fisher announce Compliance on Demand acquisition while Price Bailey partner with Ashtons Legal

1w Tom Lemmon
Employee engagement demand prompts Deloitte acquisition

Company News Employee engagement demand prompts Deloitte acquisition

2w Dave Beach
Top 20 shake-up as Saffery Champness hires S&W partner

Career Top 20 shake-up as Saffery Champness hires S&W partner

2w Dave Beach
Poor leadership hits small business while confidence sinks to two year low

Business Poor leadership hits small business while confidence sinks to two year low

3w Tom Lemmon