IBM Corp yesterday gave Wall Street another nasty jolt, warning that analysts haven’t learned their lesson from the first quarter and are still over-estimating the outcome for the second. It said that it was increasing the pace of job reductions, and now looked to lose a few thousand more people than the 14,000 cut it planned at the start of the year. IBM says that although it expects the second half to be better than the first, it is unlikely to improve sufficiently to prevent a decline in turnover for the year. IBM indicated that earnings per share for the second quarter would be below 50 cents against the $2.45 cents a share profit a year ago – one analyst reportedly now goes for 20 cents. IBM said its performance is being adversely affected by weaknesses in global economies, competitive pressures, and product transitions and that it is difficult to determine how long adverse economic conditions will continue. The hope for improvement in the second half is based on the outlook for general economic conditions, not for a specific business segment, IBM said. At 11.39 New York time yesterday morning, the shares, underpinned by the fact that IBM says it has no plans to cut its dividend, were off only $3.375 at $97.375 in heavy trading.
