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alstry (35.68)

IBM's Earnings Tonight

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April 16, 2008 – Comments (6)

As you know, I have been beating the drums about financial institutions laying off people and governments being forced to make budget cuts due to declining tax revenues.

Guess who IBM sells its products and services to....you guessed it big financial institutions and governments.

In addition, IBM sells to major Fortune 500 companies.  Well we have all seen the layoff notices.  We all know I have been posting about it ad nauseum. 

A big part of IT spending is getting new employees connected and trained.  If not many new employees are being added, one would think that IT spend would be curtailed absent some new technology implementation.

What is most important about this evenings report is not the past quarters numbers, but the guidance going forward.  It will be very interesting to see if all of the lay off notices and budget cuts is impacting IBM's business.

6 Comments – Post Your Own

#1) On April 16, 2008 at 12:42 PM, mandrake66 (95.26) wrote:

Guidance going forward will be 'upbeat'.

It just will be. Because.

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#2) On April 16, 2008 at 2:10 PM, madcowmonkey (< 20) wrote:

Supposedly coming in after Intel's report. Many people are watching and waiting it out with sweaty pits for sure. I will likely be wrong with my "optimism" but I suggest upbeat. They have had a decent run lately and there are just too many sides to this stock and it gives me a headache. 

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#3) On April 16, 2008 at 5:19 PM, alstry (35.68) wrote:

Did I blow this one.  However, I do not follow IBM and was not aware so much of the revenue comes from overseas consulting...about 2/3.  Nice to give advice to Oil rich countries and Asin exporters.  With a crashing dollar, it makes revenues and earnings look wonderful...just ask Coke.

The area I was focusing on was systems and technology which revenues were actually down 6.7%.  There is little doubt America is slowing rapidly.  The beige book confirmed that today and Con Way was support this evening.

Talbots got their line of credit revoked and Student Loan Funding stopped loaning some schools.  Accessing money is getting harder and harder.

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#4) On April 16, 2008 at 6:05 PM, bellard (99.45) wrote:

Al;

Most big tech has a lot of $$$ from overseas. I like csco, emc, spil. I am on board with retail. Margin squeeze is coming big time. All inputs are up - cotton, energy, wages, health care, etc..., but  no pricing power. I wanted to short CROX last year, but hesitated - Damn!

How is SPF looking? I will keep my negative view until the earnings announcement. 

 

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#5) On April 16, 2008 at 6:57 PM, alstry (35.68) wrote:

For what its worth, I see overseas slowing in the upcoming quarters as the spillover from America is exported.

As far as SPF, read my comment in the above post about reality.

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#6) On April 17, 2008 at 3:48 PM, madcowmonkey (< 20) wrote:

Tough call alstry.

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