Ibm Overcomes Mistakes To Show Strong Profit

Despite several flubs, IBM escaped the third quarter with a healthy jump in operating profit. But it lost money overall, as expected, because of extra charges for purchasing Lotus Development Corp.

Company executives said Tuesday that mistakes from the third quarter had been fixed, raising the hopes of analysts for an even more prosperous fourth quarter.

That view, along with strong earnings reports from Intel Corp., Sun Microsystems Inc. and Compaq Computer Corp., spurred technology stocks upward. IBM’s stock, which had traded down as much as $2.75 Tuesday morning, finished regular trading up $2.87-1/2 at $96.87-1/2 on the New York Stock Exchange.

IBM also said it would engage in job reductions to keep expenses moving downward. The cuts are the first announced by International Business Machines Corp. since July 1993, when it took an $8 billion charge to eliminate 85,000 jobs by the end of 1994.

Executives have not decided how many jobs will be affected in the new round of reductions, but the money IBM is setting aside for the effort suggests around 4,000.

IBM lost $538 million, or 96 cents a share, in the quarter that ended Sept. 30. It was the company’s first loss since the third quarter of 1993, when the red ink was attributed to operations alone.

This time, IBM had a $1.8 billion charge related to the Lotus acquisition. The money covers unfinished Lotus products and technology not covered in the $3.5 billion sale price.

Without the charge, IBM would have earned $1.3 billion, or $2.30 a share. The company earned $710 million, or $1.18 a share, in the third quarter a year ago.

Other companies that reported financial results Tuesday:

Itron Inc.

Earnings continued their record pace during the third quarter at Spokane-based Itron.

The maker of information and communication systems for utilities said revenues for the period ended September 30 were $39.3 million, up 23 percent from $32 million a year ago.

Net income was $2.6 million, or 20 cents per share, vs. $2.3 million, or 19 cents per share. The number of shares outstanding increased by 1 million in the last 12 months.

Spokeswoman Mima Scarpelli said the results were a continuation of increasing quarterly earnings that stretches back more than two years.

For the nine-month period, revenues climbed 32 percent to $113.1 million. Net income was $7.4 million, or 58 cents per share, compared with $5.2 million, or 44 cents per share.

President Johnny Humphries said the released of a new generation of automatic meter-reading equipment should position the company for further growth in that business.

About 163 companies are testing automatic reading systems, twice the number of a year ago.

Orders to be shipped within the next year stood at $49 million at the end of the quarter, down from $68.1 million a year ago.

But the latest figure does not include a $68 million order from Public Service Co. of Colorado, which will take delivery over the next two years.

Honeywell Inc.

Minneapolis-based Honeywell reported a 21 percent increase in third-quarter earnings.

The company, which sells control systems and space and avionics products, reported net income of $84.2 million, or 66 cents a share, for the quarter that ended Sept. 30. That compares with $69.4 million, or 54 cents a share, for the same quarter last year.

Sales were $1.68 billion, up 11 percent from $1.51 billion a year ago.

“Our order activity reflects a solid business environment overall, and the fact that we continue to benefit from increased demand for control solutions that help our customers improve safety, increase comfort, protect the environment and increase productivity,” said Michael R. Bonsignore, Honeywell chairman and chief executive officer.

For the first nine months of the year, Honeywell earned $207.8 million, or $1.63 per share. That compares to $174 million, or $1.34 per share.

, DataTimes