IBM says first quarter earnings will be far below Wall Street expectations
Monday, April 8th 2002, 12:00 am
By: News On 6
NEW YORK (AP) _ IBM Corp. jolted Wall Street on Monday, warning investors that its first quarter earnings per share would come in well below analysts' expectations.
Investors responded by dumping its shares. In morning trading on the New York Stock Exchange, IBM shares dropped $11.25, or 11.6 percent, to $86 a share.
IBM chief financial officer John Joyce blamed the warning on a ``very tough'' business environment, exacerbated by traditionally weak first-quarter technology sales.
IBM said it expects to earn 66 cents to 70 cents per share for the quarter, which ended March 31, compared to the 85 cents per share expected by analysts surveyed by Thomson Financial/First Call.
IBM earned 98 cents per share in the first quarter of 2001.
The quarter's revenues are expected to be about $18.5 billion, compared with $21.0 billion in the first quarter of last year, IBM reported. Analysts had expected IBM revenue of about $19.7 billion in the first quarter.
Joyce said IBM's Technology Group, which makes semiconductors and storage drives sold to computer makers, will be particularly hard-hit. He said he expected the division to lose $200 million in the first quarter, amid revenue declines of around 35 percent.
On Friday, the company laid off 600 workers in its massive Global Services division.
IBM will report its first-quarter results on April 17.