Daily Report: I.B.M.\'s Somewhat Unsettling Quarterly Performance

I.B.M., as the world's largest supplier of information technology to corporations and governments, is closely watched as a gauge of technology spending trends. It delivered a mixed and somewhat unsettling quarterly performance on Tuesday. Profit in its third quarter barely exceeded Wall Street's expectations, while revenue fell well below.

The results, analysts said, were unlikely to reassure investors concerned about the global outlook for technology spending, Steve Lohr reports in The New York Times.

In a conference call with analysts, Mark Loughridge, I.B.M.'s chief financial officer, said the revenue shortfall came from a slowdown in business, especially in September, in markets including the United States, where revenue fell 5 percent.

“It was surprisingly disappointing,” said A.M. Sacconaghi, an analyst at Sanford C. Bernstein. “All the businesses were light.”

Shares in I.B.M. fell $9.40 a share, or 4.5 percent, to $201.60, in early t rading in New York on Wednesday.

Elsewhere on the Internet, Timothy Prickett Morgan of The Register, wrote: “It takes three dollars of services revenue to make the same profit as one dollar of software revenue. And I.B.M.'s hardware business makes no money at all, if you look at it the way I.B.M. does its books. But as we all know, if there is no mainframe, there is no software or services.”

The Daily Finance Web site noted that “I.B.M. could drag down the DJIA by as much as about 50 points if all of the other 29 components remain static on Wednesday.”