Showing posts with label U.S. Federal Government. Show all posts
Showing posts with label U.S. Federal Government. Show all posts
Saturday, October 19, 2013
IBM Third-Quarter Revenue Misses Street on China Woes
IBM reported a 4 percent drop in third-quarter revenue, worse than expected by Wall Street, amid a decline in hardware and emerging markets even as it beat earnings estimates.
IBM (IBM) shares fell 6 percent in after-hours trade to $175.56.
Chief Financial Officer Mark Loughridge said on a conference call for investment analysts that third quarters tended to be difficult for the world's largest technology service provider but added the company faced some particular challenges this year.
Profitability in its hardware business declined by $1 billion year-to-date and currency effects had a $500 million year-to-year negative impact, he added.
There is increasingly less demand for hardware as software replaces traditional infrastructure. IBM has recognized that trend and is itself shifting to become a more software focused business.
Hardware was mostly hit in China, which Loughridge said broadly accounted for about 5 percent of IBM's business and about 40 percent of that business was hardware. China's growth has slowed this year, impacting corporate and public spending as the country develops an economic reform plan.
"As far as the growth markets are concerned, we will be dealing with the China impact for another couple of quarters," Loughridge said.
Revenue dropped 4 percent to $23.7 billion, below Wall Street analyst expectations of $24.74 billion, mainly due to the decline in its hardware division, excluding its System z mainframe servers, and in emerging markets, which were down 9 percent.
Hardware revenue was down 17 percent, while System z mainframe revenue rose 6 percent.
Quarterly net income rose 6 percent to $4.0 billion, or $3.99 a share on a non-GAAP basis from $3.62 a year earlier, above estimates of $3.96 a share, according to Thomson Reuters I/B/E/S.
The revenue drop was worse than investors expected, RBC Capital analyst Amit Daryanani said.
Edward Jones analyst Josh Olson agreed, saying it was a disappointing quarter from a revenue standpoint.
"I think that the hardware business is going to be something they need to work through, and growth markets are down much more than expected," he said.
Olson added that the services backlog was healthy, but "we are not seeing the conversion of that backlog into meaningful revenue."
The company reiterated its full year outlook of non-GAAP EPS of at least $16.25. But ISI Group analyst Brian Marshall said there was concern that IBM's days of double-digit EPS growth are nearing an end.
"Increasingly, we believe IBM has been relying on non-operating, inorganic drivers of EPS growth," he said.
Asked on the call if investors should prepare for no revenue growth and less than double-digit earnings growth in the future, Loughridge promised "stronger operational performance as we go into 2014."
IBM's hardware business should return to profit growth in the second half and stabilize profit on a year to year basis for the year, he said. Emerging markets would return to mid-single-digit performance for the 2014 full-year especially after the implementation of China's new economic plans, he added, without specifying the measure of performance.
Asked about the impact of the U.S. federal government shutdown, Loughridge said that there would not be much of an impact to the company if the issue is resolved this month.
"If this extends into December, then it's going to get to be a meaningful number, say around a nickel, that we would probably not be able to contain," he said.
The U.S. federal government business was a little less than 3 percent of the total revenue mix, Loughridge said.
source: dailyfinance.com
Thursday, October 3, 2013
How govt shutdown ripples across America
Science was put on hold, normally bustling stores went quiet and families depending on government aid feared losing their baby food as a government shutdown rippled across the country.
The budget impasse in Washington shut all but essential U.S. government services for the second straight day on Wednesday, while neither political party appeared willing to budge.
Republicans want to tie continued government funding to measures that would undercut Obama's signature healthcare law, while Obama and his Democrats say that is a non-starter. (Full Story)
Here are some snapshops of people affected across the United States.
SEARCH FOR MISSING HIKER DEFIES SHUTDOWN
Some work was just too important to halt for Ted Stout, 50, even though he was furloughed Tuesday as park chief of interpretation and education at Craters of the Moon National Monument and Preserve in central Idaho. Wednesday marked his eighth day of searching for a missing hiker.
Stout said he and several other laid-off workers would keep combing the vast lava fields for 63-year-old Jo Elliot-Blakeslee on their own time, without pay and despite worsening weather.
"It’s pretty much consuming our lives. We can't let her down now. This needs to continue," said Stout, who has worked for 10 years at a National Park Service site that spans 750,000 acres (300,000 hectares) of volcanic rifts, cinder cones and underground tunnels carved by ancient lava flows.
At its height, the hunt for Elliot-Blakeslee and a companion found dead last week from exposure drew helicopters and up to 100 searchers but those efforts have been scaled back partly because of the government shutdown, Stout said.
"We’re just in a real unusual situation," Stout said. "All we can do is keep looking."
LIVING ON THE EDGE
Jocelyn Gonzalez, 22, is a stay-at home mother in Los Angeles who relies on assistance for her two young kids from Women, Infants and Children (WIC), a food voucher program the U.S. Department of Agriculture says it may not be able to fund if the shutdown lasts into late October.
Gonzalez’s husband, Alexis, works as a waiter and makes less than $1,000 a month, she said. Because of a lack of income, her family around the time the birth of her oldest child, Hazel, had to move from the working class Lincoln Heights neighborhood of Los Angeles to a cheaper, higher-crime area south of downtown.
They started receiving WIC when Hazel was born, and with an infant daughter, Delilah, now part of their family they rely on the program’s coupons to get free milk, baby food, formula, fruits and vegetables, she said.
"There’s been times where we don’t have a lot of money but I have my coupons right there," Gonzalez said.
If the WIC program runs out, Gonzalez said her options will be limited.
"We can’t afford daycare so I don’t know what I would do," she said. "I can’t even imagine, because it helps us out a lot."
FAST FOOD SOLUTION
Myrna Pascual, 61, an analyst with the U.S. Department of Housing and Urban Development in San Diego, fears a U.S. government shutdown could force her to borrow against her home, increase her credit card use and possibly look for work at fast food restaurants.
"I would do that just to get by, because I'm not saved up," said Pascual.
If Pascual remains out of a job until next week, she said she plans to file for unemployment benefits, but cannot be sure she will be eligible.
Her husband is retired and has limited resources on a fixed income. Both of her college student daughters still live at home.
She recently rented a room in her home to a boarder and started selling some of her possessions on eBay.
"My options are very limited," she said. "I'm just hoping for the best."
HOLD THE DONUTS
The Dunkin' Donuts near three of Chicago's federal office buildings usually has a line out the door as court clerks, Environmental Protection Agency lawyers and Internal Revenue Service agents feed their sugar habits.
On Wednesday, business was so scarce one customer had three attendants, each of them offering "Can I help you?" in chorus. This makes store manager Vanessa Banderas nervous about her workers' jobs, and her own.
"The way it was today, it was like 'Oh my God, where is everybody? Where's the business?'" said Banderas, 30, of Chicago, a single mother with four school-age children.
If business remains this slow, she will have to temporarily lay off about half of the store's 18 workers, she said.
"I just thought Obama's doing the right thing because he wants health care for everyone and then look what's going on," Banderas said.
SCIENCE SHUT DOWN
National Weather Service meteorologist Amy Fritz helped build the computer model that predicted flooding from Hurricane Sandy that hammered New York and New Jersey a year ago. Now the roughly 65 people in her office have been sent home without pay.
"It's like getting the wind knocked out of you," said Fritz, 38 and a union steward, who faces $130,000 in student loans for her masters degrees in oceanography and meteorology.
The family's main breadwinner, she pays $500 to $600 a month on the loans, plus rent and health insurance.
Now, all spending is on hold.
"I need a new laptop," Fritz said. "That's not happening."
PAYCHECK 'HELD HOSTAGE'
In a time of crisis, Karen Buondonna looks for levity. She jokes that she is well-prepared for the furlough because it is her third in just over two years, thanks to a stop-gap funding extension and sequestration.
A researcher for the Federal Aviation Authority's drone program in New Jersey, Buondonna considered riding out the government shutdown at the beach in Atlantic City. But, faced with the prospect of losing a paycheck, she has spent her days at home, hoping to be called back to work.
"My paycheck is being held hostage because of something I am not a part of," said Buondonna, 46, the main bread winner in her family, which includes her 6-year-old daughter and 9-year-old son. "It's very disruptive and very stressful. I have bills to pay just like everyone else."
Buondonna, speaking as a representative of her union, and not as an employee of the FAA, said she has already canceled a planned kitchen renovation and may have to use her savings to make her next mortgage payment.
But what she was most distressed about was being prevented form doing her job.
"It's not just a job to me," she said. "I believe in the mission of my agency. I am a dedicated government worker."
NO FISHING
Among the federal parks closed by the shutdown is Florida's Everglades National Park, where Rich Smith, 33, has been fishing since he was a boy and today makes his living as a guide.
Park Rangers have told fishing guides to stay out of the park during the shutdown, threatening them with big fines if they disobey, he said.
"Unfortunately there isn't anything else for me. This is my 11th year of guiding full time, you don’t just pick up and do something else. In the Florida Keys we’re 100 per cent about tourism," Smith said.
Smith fishes more than 200 days a year in the park, charging customers $400 to $600 for four to eight hours of fishing. A month-long shutdown could cost him as much as $10,000.
Smith had a trip booked for Thursday, paid for months ago by a repeat customer. Now he may have to cancel.
"There are other areas he can fish," Smith said, "but the Everglades is one of the best destinations on planet earth."
RIPPLE EFFECT 'HURTS EVERYONE'
Victims of discrimination will just have to wait.
Rebecca Eaton and her colleagues at the Seattle branch of U.S. Equal Employment Opportunity Commission investigate claims of employment discrimination in violation of federal law in Washington state, Montana, Idaho, Oregon, and Alaska.
They arrived at work on Tuesday to a memo instructing them to freeze all legal cases and close the office.
"The ripple effect of this one thing is hurting everybody," said Eaton, 39, a legal assistant, who has so far constricted her spending and cancelled an annual vacation.
She worries unemployment benefits could be delayed because federal funding that covers processing costs in the Washington state office have been halted. The state unemployment office said it was covering this shortage by dipping into its own limited funds, which could run out in a few weeks.
source: www.abs-cbnnews.com
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