Feeds

Big Blue stock drops after reporting practices slammed

IBM's sums too tricky for brokers, apparently

  • alert
  • submit to reddit

Remote control for virtualized desktops

IBM shares lost $4.125 at one point yesterday, and closed down $1.5625, following a report quoting the forensic accounting expert Howard Schilit of the Centre for Financial Research and Analysis in Rockville, Maryland, who criticised Big Blur's treatment of one-time gains in its accounts. Schilit had issued a report suggesting that IBM's Q3 results would be lower after one-time gains were taken into consideration. IBM disposed of its Global Network for $4 billion in Q3, which boosted income, but associated restructuring write-downs were included in earlier quarters. The contentious issue concerns financial reporting practice rather than accounting. IBM includes the one-time gains in earnings, and has done so since 1994. In addition, restructuring charges are reported in the operating results, which reduces profits (and tax of course). IBM's investor relations chief, Hervey Parke, said that IBM conformed to the Financial Accounting Standards Board and SEC guidelines. It seems that First Call/Thomson Financial asks brokerages to exclude non-operating charges from their estimates, from which the consensus is calculated, so IBM's reporting methods may require a little more arithmetic from the financial analysts. When IBM reported its Q3 last month, the headline news was a profits warning, with Lou Gerstner putting the blame on Y2K. Earnings were said to be in line with expectations. ®

Intelligent flash storage arrays

More from The Register

next story
MI6 oversight report on Lee Rigby murder: US web giants offer 'safe haven for TERRORISM'
PM urged to 'prioritise issue' after Facebook hindsight find
Assange™ slumps back on Ecuador's sofa after detention appeal binned
Swedish court rules there's 'great risk' WikiLeaker will dodge prosecution
NSA mass spying reform KILLED by US Senators
Democrats needed just TWO more votes to keep alive bill reining in some surveillance
'Internet Freedom Panel' to keep web overlord ICANN out of Russian hands – new proposal
Come back with our internet! cries Republican drawing up bill
What a Mesa: Apple vows to re-use titsup GT sapphire glass plant
Commits to American manufacturing ... of secret tech
prev story

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Driving business with continuous operational intelligence
Introducing an innovative approach offered by ExtraHop for producing continuous operational intelligence.
10 threats to successful enterprise endpoint backup
10 threats to a successful backup including issues with BYOD, slow backups and ineffective security.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?