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of IBMs Fourth Quarter and Final 1999 Business Results
Slam-Dunk of Bunk!
Biggest Surprise: A Sharp Drop in Services Revenue Growth - Up Only 2%!
PHOENIX, Jan. 19 In our 30+ years of following IBM and the computer industry, we've certainly heard our share of BS from various IBM and other executives. But rarely has so much bunk been plunk(ed) on so many deaf ears by so few IBM executives shifting of gears, as was the case during this afternoon's 4Q99 teleconference with analysts. In terms of delivering pure bunk, John Joyce has just scored a slam-dunk!
A $557-million loss incurred by the Bug Blues PC operations in 1999 was a profit decline, according to IBMs CFO John Joyce.
A precipitous drop (down to only 2% in 4Q99) in the growth of IBM Global Services revenues, IBMs crown jewel and the only working string in its violin, should give us cause for optimism. Why? Because were pleased the Y2K issue is behind us, according to Joyce.
So how will the stockmarket react to such a heap of bad news from Armonk? Look for the IBM stock to rise tomorrow (Jan. 20).
Rise? Yes. Why? Because any sane analyst would have left the crazed Wall Street casino long ago. And because the remaining ones will probably rejoice tomorrow that IBM had not dumped any bigger surprises on them, as the now demoted former IBM CFO, Doug Maine, did last October (see Annex Bulletin 99-32, 10/21/99). After all, they have to protect their bullish forecasts, dont they?
sin on Wall Street, the street of sinners these days, isnt to sin.
Nor to report the spin as news, as IBM has just done. The sin at the
Wall Street casino these days is to be found out.
And our bet is that Wall Street wont want to find out just how
badly IBMs business has been hurt. Not
only by the Y2K problem; by its heavy dependence on the industrial era
dinosaurs - still IBMs biggest and best customers.
Against which we warned almost four years ago (see Louis
XIX of Armonk, Annex Bulletin 96-42, Aug. 21, 1996).
. Thank you. Happy bargain hunting!
NOTE: The print edition of this report, of course, contains additional charts and tables not included here.
Volume XVI, No. 2000-04
Editor: Bob Djurdjevic
5110 North 40th Street, Phoenix, Arizona
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