12 March 2002 Systems giant IBM’s most recent annual report – in which the company has said it will provide more transparent reporting – has been warmly received by analysts in the US.

Considered as one of the most opaque of publicly listed technology companies, in February 2002 IBM promised to increase the level of detail for assets included under the ‘sales, general and administrative’ (SG&A) line of its financial reports.

According to Don Young, an analyst at investment bank UBS Warburg, the new annual report puts the company in “a more favourable light” when considering underlying earnings. Speaking to the Wall Street Journal, Young said he had calculated that IBM’s income in 2001 benefited by $1.27 billion (€1.46bn) from various non-operating gains and losses, compared with $2.12 billion (€2.4bn) in 2000, proving that such assets are not propping-up IBM’s results.

However, David Hines, president of Avalon Research Group, a US-based investment analyst, says that the increased disclosure means that IBM is less likely to meet analysts’ earning forecasts in a consistent manner.

For the full year 2001, IBM reported $7.7 billion (€8.8bn) net income, a fall of $370 million (€423.8m) from 2000, on revenues that decreased $2.5 billion (€2.9bn) to $85.9 billion (€98.3bn) in 2001.

Fourth-quarter 2001 net income was $2.3 billion (€2.6bn), a 12.7 percent decrease from $2.7 billion (€3bn) in the year-earlier period. The company’s fourth quarter 2001 revenue totalled $22.8 billion (€26.1bn), down 10.9 percent compared with fourth quarter of 2000.