Jul, 2002 : IBM Expects Slower Growth in Services Segment

📅 July 19, 2002 - IBM expects slow revenue growth during the second half of this year due to a decline in business in its key services segment.

The company's chief financial officer John Joyce predicted during a conference call with analysts this week that Big Blue's earnings would be below Wall Street forecasts.
Joyce attributed this revision in growth and earnings outlook mainly to service contract signings missing expectations. IBM signed $10.6 billion in services contracts in the quarter.
"Last quarter, we said we thought we could hit double-digit revenue growth in services in the fourth quarter. But due to customers deferring signings, we now only expect to return to modest revenue growth in the second half of 2002. An economic pickup would be the catalyst to help customers move ahead with their plans, opening up the pipeline," he added.
IBM's services segment includes outsourced IT and Web host solutions for large cap companies.
Joyce stated that the company's revenue would only reach $4 per share excluding money-losing operations. Wall Street analysts had expected $4 per share including unprofitable business divisions and losses.

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