IBM uses website to rebut analyst for the first time

NEW YORK: For the first time, IBM used its website to challenge an analyst's report. A recent sell-side report from an unnamed Wall Street analyst questioned Big Blue's long-term business model of mid to high single-digit revenue growth and double-digit growth in earnings per share.

NEW YORK: For the first time, IBM used its website to challenge an analyst's report. A recent sell-side report from an unnamed Wall Street analyst questioned Big Blue's long-term business model of mid to high single-digit revenue growth and double-digit growth in earnings per share.

IBM issued a rebuttal last Monday in the IR section of its website. "We believe that [investors] should question the report's conclusion," it said.

IBM would not comment further on the report nor identify the analyst. The online rebuttal was an easy IR method to correct what IBM saw as mistakes, said Edward Barbini, IBM's VP of media relations.

"It's just a vehicle to speak to our 2.6 million investors and those who are considering investing," he added.

Lou Thompson, president of the National Investor Relations Institute, said it's not unusual for companies to use their IR websites in this way but Barbini said IBM had never done it before.

The analyst report stated that IBM's future EPS growth would be 7% to 9%, based on numbers from the mid-1990s to the present. IBM said future projections should not be based on such a "volatile time." The company noted that that timeframe was dominated by the dot-com bubble and sustained economic weakness.

IBM also challenged the report's claims that the company would see diminished impact from pension income, intellectual property income, and reduced taxes. The company's statement noted that IBM's tax rate has been stable for several years and that IBM's EPS grew by double digits last year and in the first quarter of this year.

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