Friday, October 16, 2009

“IBM Profit Rises Despite Tech Sales Slump - Industrial Distribution” plus 4 more

“IBM Profit Rises Despite Tech Sales Slump - Industrial Distribution” plus 4 more

IBM Profit Rises Despite Tech Sales Slump - Industrial Distribution

Posted: 16 Oct 2009 06:17 AM PDT

SAN FRANCISCO (AP) -- IBM Corp. is a rare example of a company that has kept boosting profit and jacking up its guidance even as the recession has sapped its sales.

The ability comes from IBM's transformation from a hardware company on the brink of collapse in the 1990s to a one-stop technology shop that rivals are trying to emulate.

IBM now focuses on outsourcing and other services that save clients money are more profitable than selling hardware. A flurry of recent acquisitions from Hewlett-Packard Co., Dell Inc., Xerox Corp. and Oracle Corp. have thrust those companies deeper into IBM's turf.

IBM's latest results, reported Thursday, show why its business model might be attractive to rivals.

Revenue dropped 7 percent in the July-September quarter, but profit jumped 14 percent and IBM raised its 2009 forecast for the second time.

IBM expects at least $9.85 per share in profit in 2009, ahead of analysts' average forecast of $9.78 per share, according to Thomson Reuters. IBM had raised its guidance before, in July, to at least $9.70 per share.

Still, shares fell 3.7 percent in extended trading after closing the regular session at $127.98, down 37 cents. Some investors were apparently disappointed the increase wasn't bigger.

"A lot of us thought you might get even better than this," said Peter Misek, an analyst with Canaccord Adams. "But these results are solid."

IBM's net income in the quarter ended Sept. 30 was $3.2 billion, or $2.40 per share, versus $2.8 billion, or $2.04 per share, a year ago. Analysts expected $2.38 per share.

Sales were $23.6 billion, slightly better than the $23.4 billion expected by analysts polled by Thomson Reuters. Revenue would have been down 5 percent instead of 7 percent if it were not for currency fluctuations.

The value of services contracts that IBM signed in the quarter was $11.8 billion, a decline of 7 percent from the same period in 2008.

While IBM makes most of its money from services and software, hardware still makes up nearly a fifth of its revenue. Mark Loughridge, IBM's chief financial officer, said in an interview that market share gains in servers at the expense of the world's No. 4 server maker, Sun Microsystems Inc., were a significant help in the quarter. IBM has exploited uncertainty about Oracle Corp.'s proposed $7.4 billion acquisition of Sun to steal away customers.

IBM's numbers show that corporations are still reluctant to spend on some kinds of technology. Accenture, an IBM rival in consulting, and Intel Corp., which makes most of the world's computer microprocessors, have recently said a recovery might not happen until next year.

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Oracle Sees Bright Horizons with Sun - Datamation

Posted: 16 Oct 2009 06:53 AM PDT

October 16, 2009
By

Reuters




SAN FRANCISCO (Reuters) - Oracle Corp CEO Larry Ellison talked up his company's prospects after a planned purchase of Sun Microsystems Inc, saying he hopes the deal will help more than double revenue within five years.

Ellison, who co-founded the company 32 years ago and built it into the world's No. 2 maker of business software, said his purchase of ailing Sun, the No. 4 computer server maker, will transform his company.

He plans to customize Oracle's software with Sun's hardware, selling specialized computers and storage devices that offer better performance than ones using hardware and software from other companies.

Investors have not embraced the deal, worrying that Sun will distract Oracle executives and hurt Oracle's margins. But Ellison asked investors to back his plan.

"We can't be copycats and win. You can't be the seventh mover and take the lead," he told more than 100 analysts and investors in San Francisco.

He said that while Oracle's margins will initially shrink following its purchase of money-losing Sun, he expects he will be able to run the business "very, very profitably."

Ellison also told the group he planned to remain aggressive in making acquisitions, saying there were some "terrific" candidates to choose from. He said he will consider buying other software and hardware companies.

Jefferies & Co analyst Ross MacMillan said that Ellison was persuasive in addressing investor concerns about the Sun acquisition.

"It was a very upbeat day," MacMillan said.

The software giant is also making a big bet on Web-based computer programs, a fast-growing segment of the tech sector that it has been slow to enter.

Senior company executives said that they will release a suite of 43 Web-based software modules to help corporations manage tasks from accounting and human resources to sales and procurement.

That will give Oracle the broadest selection of so-called cloud-based business management applications for large corporations of any major technology company. Rivals such as Salesforce.com Inc and SAP AG currently offer a limited selection of such products focused on software for managing sales activities.

Senior Vice President Anthony Lye said in an interview that the products will be released next year as part of Oracle's highly anticipated new line of Fusion Apps software.

Customers will have the option of buying programs to run in their own data centers or purchasing Web-hosted services from Oracle, he said. He spoke to Reuters on the sidelines of the investor conference.

Oracle is embracing cloud-based software as researchers forecast brisk sales growth for the sector, even as the overall tech market slumps. Such products are also known as Software as a Service, or SaaS.

Gartner Research expects 2009 SaaS sales to surge 22 percent to a record $8 billion. The firm expects the market to grow at average annual rates of 19 percent through 2013, far above the 5 percent growth for the overall business management software market.

Fusion Apps is one of the most closely watched in Oracle's 32-year history. Ellison has staked his reputation on the success of the product, investing five years and billions of dollars on its development.

Copyright 2009 Reuters. Click for restrictions.

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CEOs, ag minister call for agricultural investment - WLOS.com

Posted: 14 Oct 2009 11:59 PM PDT

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DES MOINES, Iowa (AP) -- The chief executives of two major agriculture companies and the agriculture secretary of the Netherlands say greater investment, innovation and improved public-private partnerships are needed to meet the world's growing ...

Case involving Hauppauge company's check a mistrial - Newsday

Posted: 16 Oct 2009 05:48 AM PDT

October 16, 2009 By CHRISTOPHER SHERMAN. The Associated Press

A mistrial was declared Thursday in the case of a Texas mayor who said he accidentally deposited a $26,000 city check made out to a Hauppauge business into his personal business account.

Jurors failed to reach a unanimous decision on the theft, abuse of official capacity and misapplication of fiduciary property charges that Brownsville Mayor Pat Ahumada faced.

Ahumada called the trial "surreal" and compared the painful experience with the deaths of his wife and daughter, who died in separate accidents in the 1980s.

"I've done nothing wrong," Ahumada said outside the courtroom, surrounded by family and supporters. "I know there are a lot of people who would like to see me go down."

Jurors deliberated the case for two hours Wednesday and returned for a full day of discussions Thursday. They told Judge Robert C. Pate at 2 p.m. that they were deadlocked. Pate told them if they could not reach a verdict they would have wasted the court's time and asked them to keep deliberating. They returned an hour later saying they saw no prospect for a unanimous verdict on any charges.

Pate set a new trial for Jan. 19.

Ahumada said later that he understood the jurors were split 7-5 in favor of not guilty. He could have faced up to 10 years in prison for each of the three counts if convicted.

Ahumada gambled and testified in his own defense Wednesday, trying to convince jurors he would not have been so stupid as to intentionally deposit a check made out to a vendor from Hauppauge into his own account.

Prosecutors showed clearly that Ahumada had dropped the check off at his bank on his way to Mexico last October and spent more than $5,000 in the three weeks before the bank notified him. But none of the state's witnesses could offer any explanation for how the check made it from the city's finance department into Ahumada's hands, leaving open the possibility it was the accident Ahumada claimed.

Ahumada pulled into a commercial business lane at his local bank branch to make a deposit last Oct. 28. He endorsed the back of a $26,139 check from the city of Brownsville to Tarsia Technical Industries of Hauppauge for equipment at the public library and added his account number.

Teller Julio Salazar testified Tuesday that he noticed the check was not made out to the mayor, but he accepted it and filled out a deposit slip because he knew Ahumada and "I never thought he would be breaking the law by giving me this check."

Salazar said he was put on probation for three months for violating bank policy.

Ahumada, known for his vocal criticism of the border fence between Texas and Mexico, initially denied having deposited the check, suggesting political enemies were trying to set him up. When bank surveillance videos showed otherwise, he said he did not remember making the deposit.

After the trial Thursday, Ahumada continued to suggest the entire affair was politically motivated, saying "this is the price you pay when you play with the big boys."

Brownsville is a city of more than 170,000, about 275 miles south of San Antonio. It sits across the Rio Grande from Matamoros, Mexico.

Ahumada is serving the second year of a four-year term as mayor.

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Executives Say Business Conditions Improving - ABC News

Posted: 15 Oct 2009 10:29 AM PDT

CARY, North Carolina (Reuters) - Top U.S. executives are becoming more hopeful about the global economy and the U.S. business outlook, according to a survey of business leaders released on Thursday.

More than 60 percent of corporate leaders surveyed by the Business Council in October now expect conditions in their own industry to improve over the next six months. In contrast, almost 90 percent of those surveyed in February said conditions were worsening.

The outlook is "better and improving, said James Dimon, Business Council vice chairman and JPMorgan Chase & Co chief executive officer. "It's a really dramatic swing."

More than half of the Business Council members say they expect the global economy to continue to improve moderately during the next six months.

Still, worries about inflation prompted almost 46 percent of CEOs to say the U.S. government should begin to unwind its massive asset purchases to avoid inflationary pressures. In May, just 15 percent of respondents had supported the measure.

The Business Council is an association of about 120 CEOs from the largest U.S. companies. Members meet several times a year to discuss major business issues such as health care policy.

Some 70 percent of the survey respondents said they expected the retail sector to show continued moderate improvement.

"These results are encouraging, given that consumer confidence is rated the single most important factor in shaping the outlook for 2010," according to the survey, which was compiled by the Conference Board.

CEOs said their ability to raise prices had improved. More than 53 percent said pricing power had stabilized and 26 percent said prices were rising.

Still, executives remain cautious about next year. The majority of Business Council members expect the U.S. economy to grow at a rate of 2 percent or less during the first half of 2010.

"We need to create an environment here that attracts investment," said James Owens, chairman and CEO of Caterpillar Inc . "We're going to need to make a transformation as an economy into one that saves more, invests more and exports more."

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