Further details of IBM Credit Corp’s 1988 performance filed with the US Securities & Exchange Commission show that IBM’s leasing arm saw its operating net profit fall 8.9% to $78.2m, and an accounting change was responsible for the entire 52% increase that the company was able to report – it recorded net profit up 52% at $130.5m. The firm also took $25.2m in writedowns to reflect lower estimates of the residual values of computer equipment out on lease. Return on equity however improved, rising to 18.5% from 13.1% in 1987. The leasing company, which faces stiff competition in what is becoming an increasingly difficult market, bought $6,300m of equipment from its parent last year.
