P.M. BRIEFING : IBM Stock Off on Earnings Forecast
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NEW YORK — International Business Machines Corp.’s stock fell about 5% in early trading today after IBM said it expects earnings for the current quarter to come in below the current range of security analysts’ estimates.
The stock was off $5.62 1/2 a share to $111.87 1/2 after a half hour of trading on the New York Stock Exchange.
IBM also said that if the effects of the stronger dollar and the shift to leasing by IBM customers continues for the rest of 1989, “it will also be difficult for IBM to achieve full-year results within the current range of estimates.”
The rise of the dollar hurts reported earnings of multinationals such as IBM by cutting the dollar value of profits that are made in foreign currencies. The shift to leasing cuts into short-term revenue by spreading out payments from placing new products with customers.
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