
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, April 13, 1991                   TAG: 9104130201
SECTION: BUSINESS                    PAGE: A-8   EDITION: STATE 
SOURCE: Associated Press
DATELINE: NEW YORK                                LENGTH: Medium

IBM RECORDS FIRST QUARTERLY LOSS; RECESSION, NEW ACCOUNTING BLAMED

International Business Machines Corp. on Friday reported its first-ever quarterly loss, a $1.73 billion deficit caused in part by the recession and by a new method of accounting for retiree benefits.

Revenue during the first quarter slipped 4.5 percent to $13.55 billion from $14.19 billion in the first quarter of 1990, IBM said.

"The quarter itself was pretty ugly," said Stephen Cohen, research director at SoundView Financial Group Inc., a high-technology research firm in Stamford, Conn.

IBM said the loss translated to $3.03 a share, compared with a profit of $1.04 billion, or $1.81 a share, in the year-ago quarter.

The world's largest computer company recorded a $2.26 billion charge during the quarter, or $3.96 a share, to cover costs associated with the adoption of a new accounting rule on post-retirement health benefits. All U.S. companies eventually must make the accounting change.

Without that charge, profit would have been 93 cents a share, roughly half of the profit posted in 1990's first quarter.

Three weeks ago, IBM made an unusual announcement to warn that its first-quarter profit, before the accounting charge, would be about half the $1.80 a share analysts anticipated. IBM blamed the effects of the Gulf War and the recession.

In a conference call with analysts Friday, IBM again blamed the economic slump for earnings and revenue declines.

"They saw it in just about all their product segments and geographies they do business in," Cohen said.

IBM offered little assurance that earnings would pick up soon, analysts said, except to say it was looking for the economy to improve in the second half of the year.

"The worldwide economic slowdown has created an uncertain and difficult business environment," IBM Chairman John F. Akers said in a statement from the company's headquarters in suburban Armonk.

"However," Akers said, "we believe the underlying long-term need for, and value of, our products and services has not diminished. The strength of our product line and the actions we have taken to improve our efficiencies place us in an excellent position to take advantage of any economic improvement."

Though analysts had accurately forecast the loss, investors appeared concerned about the company's lack of assurances for the rest of the year. IBM's stock was down $1.75 a share in late-afternoon New York Stock Exchange trading to $108.87 1/2.

by CNB