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Some investors are nervous about IBM's pending second quarter results because of the recent 14 percent decline in the price of its stock, compared to 2 percent declines in the Dow Jones Industrial Average and the Pacific Stock Exchange high technology index. Investors are concerned about the company's inability to implement cost reductions by reducing its workforce and operating expenses at the same time its revenue stream is slowing. Industry analysts expect the company to report quarterly earnings ranging from 50 cents a share up to 80 cents a share. Company executives report their cost cutting campaign is on schedule. It will reduce the company's overhead by $3 billion and reduce its workforce by 35,000 by Dec 1994. Analysts are also concerned about product transitions in its mainframe business and problems in its PC division.

Sprint Corp chairman William T Esrey is seeing his 1991 compensation increased by 35 percent, even though Sprint has suffered financial setbacks due to 1990 charges against earnings, increasing market competition and market share loss, and decreasing profits. Sprint, formerly known as United Telecommunications Inc, would have netted $380 million in 1990 without the charges; its net for 1991 was $367.5 million. Esrey's salary and bonus decreased 5 percent for 1991, but by exercising stock options, he added $1.33 million for a 1991 total of $2.4 million. Esrey received 173,400 options in 1990 and 61,529 options in 1991 and had a 1991 income of $1.14 million. Sprint's stock has fallen in value since May 1990 from $46 to $22 a share.

IBM Japan, IBM's largest overseas subsidiary, showed a sharp drop in profits for 1991 with income falling 32 percent and sales declining 4.1 percent. While IBM Japan did better than Fujitsu Ltd and Hitachi Ltd, whose earnings dropped 40 percent, this is the third year for income decrease and the second year in a row for sales decreases. IBM reported a $2.83 billion loss for 1991, but those figures did not include IBM Japan's figures. Analysts see the decline in Japanese businesses' profits as a result of a slowdown in Japan's economic growth, and IBM Japan's president Takeo Shiina sees sales improving in 1992, though not enough to predict profits. IBM Japan suffered less than its competitors due to better cost management and organization rather than its having a better market position. Net income for IBM Japan in 1991 was 54.8 billion yen down from 82.82 billion in 1990. Sales declined from 1.33 trillion yen to 1.27 trillion yen.

Hitachi Ltd, Toshiba Corp, NEC Corp and Mitsubishi Electric Corp report decreases in unconsolidated pretax profit for the first half ended Sep 30, 1991, signaling that impacts of the US recession are wide-reaching. Hitachi pretax profit fell 27 percent to 80.16 billion yen; Toshiba pretax profit fell 63 percent to 38.53 billion yen; NEC's fell 6.8 percent to 52.06 billion yen; and Mitsubishi's fell 25 percent to 46.84 billion yen. Toshiba, NEC and Mitsubishi all reduced previously announced profit forecasts for the year ending Mar 31, 1992. Compared to record high earnings the year previous, the companies are affected by Japan's slowing economy and a weak computer market in the US. To cope, the companies reduce capital spending and delay product introduction. The end result could be that Japanese companies shift from trying to make many types of products to focusing on specific technologies.

Xerox Corp announces it will report lower profit in 1990 than in 1989. Earnings for the firm in 1989 amounted to $704 million on revenue of $17.6 billion, and for 1990 profits will be smaller even before the firm takes a write off of $375 million for bad real estate investments. For Xerox, it is a familiar story, with its main office equipment business doing very well, but the firm continues to lose money with its financial services arm, and in particular its insurance units. Xerox will announce several new multi-purpose office machines that in essence combine copying, scanning, printing and facsimile capabilities in one system.

****Akers Says "New IBM" Emerging; Company Posts Dividend 04/27/92 DENVER, COLORADO, U.S.A., 1992 APR 27 (NB) -- A little over six months after using the company's e-mail to take employees […]

Computer Company Profits Cut In Half, Says Gartner Group STAMFORD, CONNECTICUT, U.S.A., 1990 FEB 5 (NB) -- The Gartner Group research company says computer makers' profits were cut in half […]

Saddled with a heavy load of debt and under pressure to improve earnings, Kodak chairman George Fisher announced last month that Kodak will sell off nearly a fourth of its […]