UPDATE 4-IBM’s Q3 disappoints, stock drops
* Stock dips after-hours as economy worries weighBy Noel RandewichSAN FRANCISCO, Oct 17 (Reuters) - IBM’s quarterly results failed to impress investors used to a stellar showing
from Big Blue, adding to concerns about lackluster corporate IT
spending and dragging its stock down more than 3 percent.The company’s earnings beat forecasts and it increased its
2011 earnings-per-share outlook but it faced a high hurdle
after recent strong reports from Oracle and Accenture , and analysts focused on slower expansion in key
regions and businesses.Further stoking worries about IT spending, business
software maker VMware Inc posted quarterly profit above
expectations but warned of uncertainty among some of its
corporate customers in Europe.”We have seen a bit more scrutiny and higher levels of
approval required. Particularly with larger deals where they
would go for CFO and CEO approval, where in the past we may not
have seen those approvals to be necessary,” said VMWare Chief
Financial Officer Mark Peeking.IBM, an information technology hardware bellwether with a
global clientele, said total services signings — an indicator
of future growth — climbed to $12.3 billion in the third
quarter, in line with expectations.”The growth rates IBM experienced in each of the regions —
Americas, Europe and Asia — are all decelerating and the
public sector is exhibiting no growth,” said Shebly Seyrafi, an
analyst at FBN Securities. “I wouldn’t say we’re falling off a
cliff, but there is a slowing in IT spending.”Revenue rose 8 percent to $26.16 billion, marginally softer
than the average forecast of $26.26 billion.Buttressed by recurring revenue that helps keep IBM’s
results steady in strong and weak economies, its shares have
outperformed the market and hit a record high on Friday. They
are up about 28 percent this year versus the Standard & Poor’s
500 index’s 4 percent dip.On Monday, International Business Machines Corp’s stock
fell 3.7 percent to $179.70 in extended trade after closing
down 2.1 percent on the New York Stock Exchange.”The company exceeded published expectations, but the
underlying expectations were even higher,” Annex Research
analyst Bob Djurdjevic said. “Investors who have been very
bullish on IBM are probably taking some profits now.”RISING CLOUDU.S. economic concerns and a worsening European financial
crisis have hurt consumer demand. Companies such as IBM that
sell hardware and software for data centers powering the
Internet have remained resilient.IBM said revenue from cloud computing in the first nine
months of this year was twice as much as in full-year 2010.Adjusted for currency, IBM’s revenue from the Americas rose
6 percent in the quarter, with Europe, Africa and the Middle
East flat, and Asia up 1 percent.IBM also derives a major portion of its revenue from
government spending and the financial services industry — both
hit hard by widening fiscal deficits and crumbling markets,
respectively.IBM has consistently beaten Wall Street forecasts. In the
second quarter, it trounced expectations with signings of new
business surging 16 percent. At the time, that stellar
performance raised hopes that 2011 would be a good year for
overall tech-spending.On Monday, it raised its full-year diluted earnings
forecast to at least $13.35 per share, from its prior estimate
of at least $13.25. Analysts had expected $13.32, according to
Thomson Reuters I/B/E/S.IBM reported a third-quarter profit, excluding items, of
$3.28 per share, up 15 percent year over year and above
expectations of $3.22.”Whatever IBM could control, they did a great job. But they
are not immune to macro conditions. Financial conditions are
tough,” said Global Equities Research analyst Trip Chowdhry.”People don’t want to cancel projects, but projects are
getting delayed. Sales cycles are getting elongated. New
projects are getting smaller budgets.”Despite uncertainty in the fourth quarter and 2012, some
portfolio managers remained confident in IBM’s ability to
weather a tougher global environment.”IBM’s business has a degree of resiliency to it. The
company has maintenance agreements that generate recurring
revenue, giving us more visibility on future results,” Wirtz
said.
Jostling for space in Mumbai
By Danish Siddiqui
To live in the worlds second most populous country and city is itself an experience. When I was asked to do a feature story on the worldâs population crossing the 7 billion mark, I realized it wasnÂt going to be an easy task. This was simply because there were so many stories to tell in this city of dreams, Mumbai.
I chose to do a story on the living conditions of MumbaiÂs migrant population who pour in to the city by the hour.
I decided to go to a slum which is inhabited mostly by migrants arriving from the northern part of India in search of a better future. Most of the migrants who live there work as taxi drivers and manual laborers. It was difficult to get access as they were always apprehensive of journalists. But I was able to convince a couple of them over a cup of tea after which they opened the doors of their one room world to me.
This same one room tenement acts as their bathroom, kitchen and living room. The one room is shared by at least 5 to 20 people who share the space, rent and other expenses.
When I first entered I was amazed to see how 10 people lived in 4.5 x 3 meters (15 x 10ft.) space. It had a small bathroom which was nothing but a one meter high wall creating a small enclosure in a corner. The room also had a slab to keep utensils and two huge containers to store water. Every inch of the room was smartly used to store the personal belongings of its occupants.
The occupants were a bit uncomfortable with my camera initially but adjusted to it over time. I called the occupants by their names which helped get rid of their initial inhibitions. I photographed the room and its occupants over four days and at different times as everyone would leave by 8 in the morning for work.
The lack of space never got in the way of the occupants having a good time and enjoying each others company. For millions of these migrants living in these conditions in their dream city they might not be living their dream but I am sure everyone is working hard to achieve it.
The youngest boy told me that he wants to become a pilot one day and fly with his family. I hope they all live to see their dream come true soon.
Millions of migrants swarm the streets of Mumbai, jostling for their inch in the big bad city everyday but the dense population of the city, with people from different regions of the country, gives Mumbai a unique special character.
Vienna Insurance has 1.5 bln euro war chest - CEO
Vienna would not need to raise capital should decide to
purchase Warta, he told journalists.He said he did not expect Warta’s life and non-life
operations to be sold separately.Geyer reiterated the group’s target to boost 2011 pretax
profit by 10 percent and said he saw no need for significant
writedowns on its holdings of Greek sovereign debt.
($1 = 0.725 euro)
