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Transportation equipment industry

Corporate America Reports Strong Third Quarter Earnings

Strategic Insights

— 1 min read

Major US companies, including IBM, AT&T, and General Motors, have reported significant profits in the third quarter, with some beating expectations. IBM's revenues on its mainframe computers rose for the first time since 1992, driven by strong sales in Europe, Asia, and the US. The company's chairman, Louis Gerstner, attributed the results to stabilizing margins and increased revenues worldwide. Meanwhile, AT&T reported a profit of $1.05 billion, while General Motors disclosed third-quarter profits of $552 million.

Key Takeaways:

  • IBM reported profits of $710 million in the third quarter, a significant improvement from a loss of $86 million last year.
  • Revenues on IBM's mainframe computers rose for the first time since 1992, driven by strong sales in Europe, Asia, and the US.
  • AT&T reported a profit of $1.05 billion in the third quarter, a significant improvement from previous years.
  • General Motors disclosed third-quarter profits of $552 million, a notable increase from last year's loss of $113 million.
  • Compaq reported third-quarter profits of $201 million, an 88% jump from last year's $107 million.
  • Salomon, on the other hand, reported a third-quarter loss of $104 million, compared to a profit of $20 million last year.
  • Strong third-quarter earnings were overshadowed by inflation fears after the Philadelphia Federal Reserve reported strong economic activity in its area.
  • A Commerce Department report showed a surprising 4.4% rise in housing starts in September, fueling nervousness in the market.

Statistics:

  • IBM's third-quarter profits: $710 million
  • IBM's mainframe computer revenue growth: 10% (year-over-year)
  • AT&T's third-quarter profit: $1.05 billion
  • General Motors' third-quarter profitability: 2.8% (up from 1.5% last year)
  • Compaq's third-quarter sales: $2.8 billion (up from $1.7 billion last year)
  • Salomon's third-quarter loss: $104 million
  • Philadelphia Federal Reserve economic activity: strong
  • Commerce Department housing starts: 4.4% (up from September)
  • 30-year bond yield: 7.97%

Sources:

  • The Wall Street Journal
  • CNBC News
  • Reuters News
  • IB Recap, IBM Press Release
  • Compaq Press Release
  • Salomon Press Release

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