The copyright-protected information contained in the ANNEX BULLETINS is a component of the Comprehensive Market Service (CMS). It is intended for the exclusive use by those who have contracted for the entire CMS service.
of IBM Credit Corp.’s 1999 Business Results
Profits Up, New Leases Down
Financing Units Follow General Big Blue Trends
PHOENIX, May 25 – IBM’s customer financing arm, IBM Credit Corp. (ICC), and Big Blue’s corresponding international subsidiaries, generally followed the parent company’s 1999 business trends (see “Slam Dunk of Bunk”). Profits were up, revenues also increased moderately, but the new contract sales declined, according to the just-released ICC 10K statement for 1999.
In part, profits were up due to ICC’s sale of leased assets to IBM (i.e., not to customers) related to AT&T’s acquisition of IBM Global Network from IBM. That was a one-time gain; of course, a mini version of “The Great IBM Lease Base Sale” of the early 1980s.
In the fourth quarter, however, it took some accounting “magic” to come up with the 64% surge in net earnings, especially since ICC’s 4Q99 revenues declined 3%. “No worries,” as they say Down Under. ICC’s bean counters with green shades, black hats and long arms simply pulled a $33 million white rabbit out of the hat to offset some of their top-of-the-line decline.
The “Provision for Receivable Losses” category had $23 million in it in the third quarter of last year. In the fourth quarter, however, not only did ICC appear to finance totally risk-free deals; it miraculously made money (about $18 million!) for the company.
Happy bargain hunting!
NOTE: The print edition of this report, of course, contains additional charts and tables not included here.
Can you afford not to know such things if you're a global competitor? To subscribe, just click on , or call us as (602) 824-8111.
Editor: Bob Djurdjevic
P.O. Box 97100, Phoenix, Arizona
Annex Research| Annex Bulletins| Quotes| Workshop| Search|
Feedback| Clips| Activism| Columns|