Although IBM’s shares were still up at midday after announcement of its dismal 1989 figures on Wednesday, they closed down $1.50 at $98.875 as the market digested the import behind them. Analysts are looking for the company to return only to the uninspiring earnings per share figures recorded for 1988 this year – they are currently going for $9.75 to $10 a share, on turnover growth of only about 7% – but even that may be over-optimistic because foreign business accounted for a disconcertingly high 59% of the total last year, up from 57.6% in 1988 – and while the US market shows no sign of bounciness, the prospects in Europe look decidedly worse this year than in 1989. Profit margins on the 3090s improved during the year, and growth in the market was a surprisingly healthy 10% plus, but IBM is projecting only single-digit growth this year. Sales of the AS/400 were flat in the fourth quarter – not as bad as it sounds since the comparison was with the storming first quarter of volume deliveries. The PS/2 and AS/400 both scored double-digit gains during the year, but software was flat in the fourth quarter and grew only 6.3% in the year – 11% if you factor out the $190m payment from Fujitsu a year earlier, but IBM has been promising for years that software will account for 20% to 30% of its business in the early 1990s – at $8,424m last year it’s still only 13% of IBM’s total business and it doesn’t look like getting to 20% any year soon.
