Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, January 20, 1993 TAG: 9301200076
SECTION: BUSINESS PAGE: B5 EDITION: METRO
SOURCE: Associated Press
DATELINE: NEW YORK LENGTH: Medium
IBM LOSES $5.5 BILLION
IBM on Tuesday reported a record fourth-quarter loss of $5.46 billion, capping a year in which the tarnished computer leader shed more than 40,000 jobs and saw its stock price tumble.The loss was caused largely by $7.2 billion in Akers pretax accounting charges taken during the quarter to pay for another 25,000 job cuts planned for 1993, the latest in a series of restructuring moves announced in the past year.
"Our financial results are not acceptable to us or our shareholders," IBM Chairman John F. Akers said in a statement. "We are taking aggressive actions to improve our competitiveness and profitability."
The loss in the October-December quarter amounted to $9.57 per share, compared with a loss of $1.46 billion, or $2.55 per share, a year earlier. Quarterly revenue fell 11 percent to $19.56 billion from $21.97 billion.
For the full year, IBM reported a record annual loss of $4.97 billion, or $8.70 per share. In 1991, IBM lost $2.86 billion, or $5.01 per share.
Revenue for the year fell 0.4 percent to $64.52 billion from $64.77 billion.
The 1992 earnings report was by far a record poor performance for International Business Machines Corp., which is based in Armonk, N.Y., north of New York City. Its previous record loss was in 1991.
Without the restructuring charges, which mostly paid for work-force reductions, IBM said it would have lost $45 million in the quarter.
For the year, IBM said it would have made $1.42 billion without the restructuring charges.
Like other big companies that dominated an industry, the 79-year-old International Business Machine Corp. has been battered by a huge bureaucracy and a failure to innovate quickly enough to embrace new markets and technologies.
IBM's stock, above $100 a share last summer, has fallen to levels unseen since 1975. On Tuesday, IBM closed down another $1.12 1/2 at $48.37 1/2 in heavy New York Stock Exchange trading of more than 5 million shares.
Analysts said IBM's quarterly and annual results were consistent with or slightly worse than expectations. IBM reduced fourth-quarter earnings by $7.2 billion before taxes to pay for its latest restructuring, IBM did not comment on the fate of its $4.84-per-share dividend, which will be on the agenda at a Jan. 26 board meeting. Akers last month said the dividend might be cut. up from $6 billion estimated when the cuts were announced in December.
"That's a stunner for a lot of people, I'm sure," said Bob Djurdjevic, president of Annex Research, a computer industry consultant.
IBM did not comment on the fate of its $4.84-per-share dividend, which will be on the agenda at a Jan. 26 board meeting. Akers last month said the dividend might be cut.