The re-rating of IBM in some quarters as a mature, slow-growth business – a view strongly reflected in the lacklustre performance of the company’s share price, and one that will have gained further ad-herents following Tuesday’s far from sparkling quarterly figures, has been offset by a couple of items of good news this week. The company was award another two Nobel prizes, and it again won the approbation of its peers. IBM came out on top in a Gallup Poll that asked top executives to name five companies they associate with high quality, the American Society for Quality Control reports. IBM was named by 59% of the executives, the only company to be named by more than half. GE was second and Ford Motor Co third. Sony Corp and AT&T both made the top 10. The Gallup Organisation surveyed high-level executives at 615 companies, half from the Fortune 1,000, half from smaller companies. The Nobel Prize for Physics is won by IBMers for the second year in succession, the beneficiaries this time being Georg Bednorz and Alex Muller, for making the original breakthrough in high temperature superconductivity at IBM’s Zurich research laboratory (CI No 744). As for those third quarter figures, the market didn’t like them much, although second thoughts prompted a recovery from the initial $4 reaction, but there were some hidden signs of improvement: the currency translation gain works out to about $0.14 a share, but that compares with $0.24 in last year’s comparable quarter. Of particular note is the fact that many industry watchers had expected the company to post a 42% tax rate, and the actual rate of only 38% inflated third quarter per share earnings by about $0.13. Partly off-setting the 11 cent gain from sale of the last of the company’s Intel shares was was a $0.09 per share charge for the cost of early retirements.
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