Louis Gerstner is getting disconcertingly jaunty. The first couple of years of his tenure at the helm of IBM Corp, he wore the mien of an undertaker, and given the parlous state of the company and the sharks still circling all around it, the contrast with the relentlessly jaunty John Akers was very welcome. But a year ago, it appeared that he suddenly started to believe his own publicity, and all that changed, and it continued at the annual meeting this year. Reuters reported from Atlanta that a confident Louis Gerstner said that there is no question that IBM is growing again and that the company is now gunning for leadership. Even in the grip of his paranoia about the Internet, that would make Bill Gates laugh. Gerstner told the annual meeting that last year, IBM was focusing on growth, and the company’s 1995 results, with $70,000m in revenues, earnings doubling and the addition of US employees, proved IBM is growing. The comments were in response to Wall Street analysts concerned that IBM is facing tougher comparisons going forward and that its growth in 1996 is slowing, amid pricing pressures in many product areas and new product competition in mainframes – all things that chief financial officer Rick Thoman explicitly warned about at the time of the first quarter report. Gerstner admitted that the company does face major challenges in all facets of the computer industry, but declared that IBM is on solid footing. Three years ago, IBM was on the endangered species list, Gerstner said; Two years ago, we talked about stability; last year it was growth; now we are gunning for leadership. As well as repeating previous comments about the industry’s movement towards networked computers playing to IBM’s strengths, he highlighted the services business, which he said is now IBM’s second-biggest revenue generator. Several shareholders raised questions at the meeting about IBM’s share price and its low price-earnings ratio.My comment is simply from your lips to God’s ears, Gerstner told one shareholder, who was predicting that the shares should reach 180 this year.
