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IBM Squeezes Out a Quarterly Profit

Technology: A slump in purchases by struggling companies drops revenue to $20 billion.

July 18, 2002|From Times Staff and Wire Reports

IBM Corp. said Wednesday that it eked out a second-quarter profit of 3 cents a share as it took a $1.4-billion charge to cover job cuts and write-offs.

Earnings at IBM, whose products range from software to microchips to computer services, fell sharply even without the big charge, as corporations concerned about their own bottom lines cut back on technology spending.

The Armonk, N.Y.-based company earned $56 million in the quarter ended June 30, down from $2 billion, or $1.15 per share, in the second quarter last year. Without the one-time items, IBM would have earned 84 cents a share, 1 cent more than analysts surveyed by Thomson First Call expected.

Total revenue fell to $20 billion from $20.8 billion in the year-ago period. Chief Financial Officer John R. Joyce said IBM was hurt by a slump in purchases by struggling technology companies.

IBM shares rose $1.68 to $70.69 on the New York Stock Exchange before the firm issued its earnings. The stock rose as high as $73.20 after the report, though shares still are off 42% for the year.

In other earnings Wednesday:

* Advanced Micro Devices Inc. posted a second-quarter loss of $185 million as it continued to struggle with weak demand and strong competition from Intel Corp. The Sunnyvale, Calif.-based chip maker said sales of its Athlon and Duron microprocessors were down 35% in the quarter compared with 2001. AMD's loss amounted to 54 cents per share, compared with a profit of $17.4 million, or 5 cents a share, in the same period a year ago. Overall sales for the quarter fell 39% to $600.3 million, down from $985 million last year. Analysts were expecting a loss of 45 cents a share on sales of $600 million. AMD also said it expects microprocessor sales to pick up in the current quarter, though not enough to prevent another loss.

* Fear of computer viruses led Symantec Corp. to a first-quarter profit of $56.6 million, or 36 cents a share, compared with a loss of $21.2 million, or 14 cents a share, a year earlier. The Cupertino, Calif.-based maker of Norton anti-virus software reported sales of $316 million in the three months ended June 30, up from $228 million last year.

* Handspring Inc., the maker of Treo hand-held computers, narrowed its fourth-quarter loss to 11 cents a share as its gross margin improved. The Mountain View, Calif.-based company reported a net loss of $15.4 million, down from $67.2 million, or 60 cents a share, a year earlier. Sales fell 20% to $49 million from $61 million.

* FileNet Corp., a Costa Mesa document-management software maker, posted net income of $1.7 million, or 5 cents a share, for its second quarter, contrasted with a loss of $10.7 million, or 30 cents a share, for last year's second quarter. Sales rose 7% to $88.2 million.

* Inktomi Corp., a Foster City, Calif., maker of Internet search software, said its fiscal third-quarter net loss widened to $235.7 million, or $1.62 a share, compared with $155 million, or $1.22 a share, a year earlier. Revenue in the three months ended June 30 fell 40% to $23.8 million from $39.6 million.

* Online bank and brokerage company ETrade Group Inc., based in Menlo Park, Calif., reported quarterly operating income of $38.8 million, or 11 cents per share, up from $5.4 million, or 2 cents a share, in the same period last year. Revenue rose to $316.1 million from $308.2 million.

* Commerce One Inc., which makes e-commerce software, said its second-quarter net loss narrowed to $71.1 million, or 25 cents a share, from a loss of $2.07 billion, or $9.02 a share, a year earlier. The Pleasanton, Calif.-based firm's sales dropped 73% to $27.8 million from $101.3 million.

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