Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, March 20, 1991 TAG: 9103200042
SECTION: BUSINESS PAGE: A-9 EDITION: METRO
SOURCE: Associated Press
DATELINE: NEW YORK LENGTH: Medium
The dramatic drop in IBM's forecast showed how the Gulf War and worldwide recession hurt a leading global company. The price of IBM stock - one of the most widely watched issues - tumbled when the earnings announcement was made.
"The disruption caused by the war is more severe than we thought. It's hitting all our product lines," said IBM spokesman Peter Thonis.
IBM told analysts in a conference call that the company expected to earn around 90 cents a share this quarter, or about half the mean of estimates made by analysts, Thonis said. Analyst estimates for the January-March quarter ranged from $1.65 a share to $1.95 a share.
In 1990's first quarter, IBM earned $1.04 billon, or $1.81 a share, on revenue of $14.2 billion.
IBM made its announcement before the New York Stock Exchange opened for the day. Trading of IBM's shares was delayed after the exchange opened because of an imbalance of buy and sell orders for the stock.
Trading began about 11 a.m. EST. Within a few minutes, IBM shares had plunged $9.12 1/2 points. The stock closed at $115.12 1/2, down $12.75 from Monday's close. More than 6.3 million shares changed hands, more than twice IBM's normal trading volume, making the stock the most-active NYSE issue.
IBM is one of the 30 major companies whose stock price averages make up the Dow Jones industrial average, a key indicator of how the stock market is doing. The Dow average fell 62.13 points to 2,867.82.
The announcement dragged down the entire market because the world's largest computer company had helped lead the market's rally over the past two months, said Peter Vandenberg, a vice president at Lehman Brothers.
by CNB