IBM's warning causes 11% fall in share price

IBM's warning, issued on Monday, caused an 11% fall in its share price and a decline in the price of other technology stocks on fears about a delay in the sector's recovery.

The company said that it expected to earn 66 cents to 70 cents per share for the quarter ended 31st March, as compared with the 85 cents expected by analysts. For Q1, 2001 IBM earned 98 cents a share.

The company's Chief Financial Officer, John Joyce, said that the reason behind the warning was the very tough business environment and the traditionally weak Q1 technology sales.

An area of IBM's business which seemed to be suffering most was that of its Technology Group, which makes chips, hard drives and computer components. He said that the revenues for this group would decline by about a third in the quarter.

Another problem suffered by IBM seemed to be that customers had delayed making purchase decisions though it was expected that these would come through in Q2.