Bear Stearns cuts IBM estimates

NEW YORK: Bear Stearns analyst Andrew Neff lowered revenue and earnings
estimates for International Business Machines Corp. late on Wednesday, saying
the shipment of a new mainframe computer later this year instead of next year
could bring a near-term revenue shortfall.

"It is clear to us that IBM did not assume a slowdown in mainframe
(sales) when it gave guidance at the beginning of the quarter," Neff wrote
in a note to clients.

Shares fell 4 to 100 on Thursday, continuing a slide seen Wednesday after two
business software providers issued profit warnings. The software companies cited
slow current sales of software for mainframe computers, raising concern that
mainframe sales slowed as customers considered the availability of the new IBM
Freeway mainframe later in the year.

"While there is no new guidance from IBM, we have lowered our (second
quarter) estimate to reflect the potential impact from lower mainframe demand,
which both companies (Computer Associates International Inc. and BMC Software
Inc.) said occurred at the end of the month," Neff wrote.

Neff lowered second quarter earnings per share estimates to 97 cents from
$1.02, and second quarter revenue estimates to $21.53 billion from $21.92
billion. Full year 2000 estimates were lowered to $4.25 but Neff said he
maintained his 2001 estimate at $4.90.

(C) Reuters Limited 2000.