IBM Beats Estimates and Looks Forward to Growth Pickup

Excite, Iomega, Sun Microsystems, and Documentum also report.
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IBM

(IBM) - Get Report

reported fourth-quarter earnings of $2.47 a share, 2 cents higher than the 21-analyst

First Call

expectation and up from the year-ago $2.11. Big Blue's CFO said in a conference call that the company made progress on picking up the pace of growth in the fourth quarter and it sees the momentum carrying into this year. He backed predictions of industry technology spending growing at an 8% to 9% rate in 1999 and said the still-struggling PC sector "sure feels a lot better than it has at any time in the past few years."

Elsewhere in tech earnings,

Gateway

(GTW)

posted fourth-quarter earnings of 81 cents a share, besting the consensus for 78 cents and the year-ago 59 cents. The company also set a stock buyback program of up to $200 million. TheStreet.com took a closer look at the company's report in a

piece tonight.

In other postclose news (earnings estimates from First Call; earnings reported on a diluted basis unless otherwise specified):

Earnings/revenue reports and previews

Document management software maker

Documentum

(DCTM)

reported fourth-quarter earnings per share of 24 cents, in line with analysts' expectations, but gave lower guidance for 1999 during the conference call.

Documentum said revenue totaled $36.4 million, with licenses garnering $23.2 million and services $13.2 million.

"They were a little short on our licensing figures but made it up in services, which has been a trend lately in a lot of software companies," said

Friedman Billings Ramsey

analyst David Hilal, whose firm has no underwriting relationship with the Pleasanton, Calif., company. He said he was expecting $25 million in licenses and $12.3 million in services for a total of $37.3 million. He said the company made its earnings number through a combination of lower costs and better-than-expected gross margins.

But more focus was put on the company's outlook. "They reduced guidance for the coming year," Hilal said. "They took off 5% from revenue and 15% from the bottom line."

Despite the less rosy outlook for 1999, Hilal says he is likely to keep his buy rating on the stock and lower his estimates in line with the company's guidance. "It's still a very well-run company with excellent technology," he said.

Documentum had sold off sharply earlier this week on speculation that the company would guide analysts' expectations lower but rebounded slightly today, closing up 2 1/8, or 8.9%, at 26 1/4. In after-hours trading, Documentum shares were up slightly, going as high as 26 1/2 with a block trade at 25 5/16, according to Brent Houston at

Mr. Stock.com

.

--

Medora Lee

Supply-chain management software developer

i2

(ITWO)

met expectations with earnings of 12 cents a share in the fourth quarter ended Dec. 31. But the surprise came with a blowout in top-line revenue, some analysts said.

"They had excellent numbers and beat our top-line revenue by $11 million," said

Credit Suisse First Boston

analyst George Gilbert. Gilbert's firm has no underwriting relationship with i2 but his previous employer,

Deutsche Morgan Grenfell

, helped take the company public. Gilbert predicted total revenue of $101.8 million, and i2 delivered $112.7, he said.

The company's conference call to investors and analysts was also upbeat. Unlike many other software companies, i2 did not caution about future earnings potentially being affected by worldwide economic jitters and fears of a slowdown in capital spending as companies focus on fixing Year 2000 bugs.

After such a solid performance, one analyst said he expected Wall Street to revise i2's estimates higher in coming days.

Shares of i2 ended regular trading hours down 1 7/8 at 27 1/2. After hours, the stock rose as high as 28 1/4 with a block trade at 27 5/8, said the aforementioned Houston at Mr. Stock.com.

--

Medora Lee

Bisys

(BSYS)

reported second-quarter earnings of 44 cents a share, in line with the eight-analyst prediction and above the year-ago 37 cents. The company also set a $100 million stock repurchase plan.

CSG Systems

(CSGS) - Get Report

reported fourth-quarter earnings of 45 cents a share, up from 24 cents a year earlier and better than the nine-analyst consensus of 41 cents. The company also set a 2-for-1 stock split.

Excite

(XCIT)

reported fourth-quarter earnings of 4 cents a share, in line with the 15-analyst estimate and up from the year-ago loss of 26 cents. The company said page views averaged 58 million a day at the end of December, up 15% from September. Excite, which is being acquired by

@Home

(ATHM) - Get Report

, said traffic rose to an average of 70 million page views a day by mid-January.

FVC.com

(FVCX)

forecast that its fourth-quarter results will not meet expectations. The five-analyst estimate called for earnings of 6 cents a share from the developer of broadband video networking equipment.

Georgia Gulf

(GGC)

reported fourth-quarter earnings of 41 cents a share, topping the six-analyst estimate of 28 cents and the year-ago 63 cents. The chemicals maker said it expected first-quarter earnings to fall below fourth-quarter results because of a decline in its methanol and aromatics businesses.

Iomega

(IOM)

posted fourth-quarter earnings of 7 cents a share, 2 cents ahead of the six-analyst forecast but below the year-ago 13 cents. The company also warned it sees first-quarter results coming in at breakeven and that two members of its senior management team quit. The company said it's realigning its operations to focus on business functions instead of three decentralized product business units. Analysts called for 4 cents in the first quarter vs. the year-earlier 7 cents. In after-hours trading, the stock fell to 9 from 9 13/16.

Just for Feet

(FEET)

predicted its fourth-quarter earnings will be lower than the seven-analyst estimate for profits of 25 cents a share.

Quaker Fabric

(QFAB)

warned that it expects its fourth-quarter results to come in near the third quarter's 4 cents a share, citing lower-than-expected incoming orders. The three-analyst estimate called for 16 cents vs. the year-earlier 21 cents.

Sun Microsystems

(SUNW) - Get Report

reported second-quarter earnings of 67 cents a share, a penny better than the 20-analyst outlook and up from the year-ago 38 cents. The company set a 2-for-1 stock split. Sun reportedly traded down slightly in after-hours action.

United Illuminating

(UIL)

said its 1998 earnings report would be delayed several days pending review of certain accounting issues by the Connecticut utility department. The four-analyst forecast calls for annual earnings of $3.57 a share vs. the year-ago $3.11.

Union Planters

(UPC)

reported fourth-quarter earnings of 19 cents a share, nowhere near the 14-analyst forecast for 80 cents and below the year-earlier 29 cents. The Tennessee bank said integrating acquisitions, asset sales and charges for loan-loss provisions hurt results.

In other earnings news:

Mergers, acquisitions and joint ventures

Perkin-Elmer

(PKN)

announced plans to sell its analytical instruments division after a strategic review initiated in September.

Offerings and stock actions

NVidia's

(NVDA:Nasdaq) 3.5 million-share IPO priced top range at 12 a share. The offering of stock in the 3D graphics firm is underwritten by

Morgan Stanley Dean Witter

. The firm raised the offering's range to 9 to 11 a share from 7 to 9 a share.

Miscellany

Boston Properties

(BXP) - Get Report

said it agreed to buy lease interests on two sites in Times Square, Manhattan, from

Prudential Insurance Co. of America

for $312.25 million.