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

DATE: TUESDAY, January 24, 1995                   TAG: 9501250036
SECTION: BUSINESS                    PAGE: B-7   EDITION: METRO 
SOURCE: Associated Press
DATELINE: NEW YORK                                LENGTH: Medium

IBM RECORDS ITS FIRST PROFIT IN 4 YEARS

IBM earned $1.2 billion in the fourth quarter and, boosted by strong demand for its large computers and by deep cuts in expenses, posted its first profitable year since 1990.

Though Monday's report from the world's largest maker of computers, software and related services exceeded Wall Street forecasts, Chief Executive Louis Gerstner Jr. said ``We are not satisfied with our revenue growth. The pace of change at IBM must continue.''

Trying to keep up with leaner, faster, younger competitors, IBM has cut tens of thousands of jobs and shed office space and factory assets over the past few years. Big Blue now employs about 220,000 people.

IBM's profit amounted to $2.06 per share for the quarter that ended Dec. 31. It earned $362 million, or 62 cents per share, in the same period of 1993.

Revenue for the quarter was $19.9 billion, up from $19.4 billion a year ago.

Fourth quarter expenses were down 11 percent, or $729 million, against the year-ago period. Annual expenses dropped 15 percent, or $3.5 billion.

For the year, the company earned $2.88 billion, or $4.92 per share. It lost $8.1 billion in 1993, or $14.02 per share, after taking a nearly $8 billion restructuring charge in the second quarter.

Revenue for 1994 was $64.1 billion, up 2 percent from $62.7 billion in 1993.

Analysts had forecast a profit of around $1.75 per share for IBM. Nonetheless, the company's stock was down 871/2 cents at $74.50 in early trading on the New York Stock Exchange.

IBM's last profitable year was 1990, when it earned $5.96 billion, or $10.42 per share.

Demand for big mainframe computers continued to outstrip supply, helping the profit margin. The company also showed strong revenue growth from sales of its AS-400 midrange computer line. Revenue from the large systems would have been even higher but for price cuts.

by CNB