IBM Hangs Tough (Update)

SAN FRANCISCO -- IBM(IBM Quote) expects to meet full-year earnings estimates, the company emphasized during its third-quarter earnings call late Thursday.

The company's confidence that it can deliver earnings of "at least" $8.75 a share implies fourth-quarter earnings of $3.07. Analysts were expecting fourth-quarter EPS of $3.06 on revenue of $25.9 billion, according to Thomson Reuters.

IBM financial chief Loughridge sought to dispel fears on the cal that the company would lose revenue from troubled banking clients, face a credit crunch, or suffer a serious downturn due to an economic contraction.

Although financial institutions account for 28% of IBM's revenue, only 1% comes from the 21 financial institutions worldwide that have been identified as troubled, according to Loughridge.

And he reassured investors that the company won't run dry of working capital any time soon. "We have a strong liquidity position," including $10 billion in cash, $4.5 billion of commercial paper with rates that are "well under Libor" -- and an untapped backup revolving credit facility of $10 billion.

Last week, IBM raised an additional $4 billion in term financing, he said. "We are not reliant on the short-term [commercial paper] market to fund the business."

As for a market slowdown, "we would have to have major markets fall off much more significantly, and we just don't see that in the data," Loughridge said. He pointed to higher short-term contract signings and a good pipeline.

"We'd have to see a dramatic slowdown in our emerging countries," where the company is still seeing high double-digit growth.