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IBM Slips Amid PC Sales Slide, Services Shortfall

IBM's revenue and net income for its fourth quarter were down 11% and 13%, respectively, to $22.80 billion and $2.33 billion, from a year ago
IBM's revenue and net income for its fourth quarter were down 11% and 13%, respectively, to $22.80 billion and $2.33 billion, from a year ago. And its vaunted services business failed to live up to growth expectations. Still, compared with beaten-down competitors with serious losses, 2001 was a very good year. For the full year, revenue was down just 3%, to $85.87 billion, compared with 2000. Net income for 2001 was $7.72 billion, down 5% from $8.09 billion in 2000.

John Joyce, senior VP and CFO at IBM (IBM--NYSE), pointed to the vendor's growing WebSphere application server software and zSeries mainframe businesses as highlights for the quarter. But PC sales declined by $17 million year over year, and IBM blamed the shortfall in its services business on late bookings for which revenue won't be recorded until this year.

Shebly Seyrafi, an A.G. Edwards & Sons financial analyst, says he was disappointed by the service business' results, but "we're coming out of a weak year, and hopefully things will be better for IBM next year."