Mon 16 Jan 2006
More details on SEC probe into IBM’s Q1
Posted by Sim' under Performance
Steve Hamm writes an analysis of the SEC enquiry into IBM’s reporting of its first quarter results.
The first quarter of 2005 keeps coming back to haunt IBM. Not only did it miss analysts’ earnings estimates, which sent its stock and credibility plunging — but the way it communicated with Wall Street in the weeks following the quarter’s close has now resulted in a formal investigation by the Securities & Exchange Commission. IBM issued a press release on Jan. 12 saying the SEC has notified it that an informal inquiry launched last summer has been escalated into a formal investigation.
The key suggestion that Steve mentions in his article is that IBM missed analysts earnings estimates, but used the excuse of a change in options expense reporting methods to mask just how much they missed by. Basically, people are accusing IBM of obfuscating the true nature of the earnings results.
IBM releases its fourth quarter earnings results on Tuesday.
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