IBM Is Still a Top Technology Buy

Article Excerpt

INTERNATIONAL BUSINESS MACHINES CORP. $94 (New York symbol IBM; Conservative Growth Portfolio, Manufacturing & Industry sector; WSSF Rating: Above average) is the world’s largest computer company. It specializes in large, mainframe computers for corporations and governments. It’s also a leading maker of software. Revenue fell from $85.9 billion in 2001 to $81.2 billion in 2002 as the economy slowed and demand for new computers and services fell. Revenue grew to $89.1 billion in 2003, and to $96.3 billion in 2004, but fell to $91.1 billion in 2005 after the company sold its personal computer operations for $1.75 billion. Profits fell from $4.35 a share (total $7.7 billion) in 2001 to $3.95 a share ($6.9 billion) in 2002, but rose to $5.05 a share ($8.6 billion) in 2004. Total profit in 2005 slipped to $8.5 billion. But per-share earnings rose to $5.22 due to fewer shares outstanding. New strategy paying off Much of IBM’s recent success comes from its shift away from low-margin businesses like…

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