Wall Street: IBM Tanking - Q3 Earnings drop - by Sam Ro

IBM shares are tumbling after the company announced disappointing Q3 earnings.

The business services giant announced $3.68 per share of operating earnings from continuing operations, which is much weaker than the $4.32 expected by analysts.

Revenue fell 4% year-over-year to $22.4 billion.

"We are disappointed in our performance," CEO Ginni Rometty said. "We saw a marked slowdown in September in client buying behavior, and our results also point to the unprecedented pace of change in our industry. While we did not produce the results we expected to achieve, we again performed well in our strategic growth areas — cloud, data and analytics, security, social, and mobile — where we continue to shift our business."

This is concerning, not just for IBM investors. As a global provider of business software and services, this could be reflective of problems in the global economy.

Read more: IBM Q3 Earnings - Business Insid

The Netherlands: IBM saved its earnings by moving almost half its employees to the Netherlands (at least on paper) - by Tim Fernholz

IBM - the IT services company, under pressure to meet a high earnings forecast, has turned to the ever-malleable tax code for a boost to its earnings. That has some pretty surprising consequences, as Alex Barinka and Jesse Drucker report for Bloomberg: The company is driving more income through a subsidiary in the Netherlands. In 2008, the subsidiary, IBM International Group BV, reported just three employees, but at the end of 2012, it reported 205,000—almost half of the company’s worldwide staff of 430,000 workers.

Of course, we’d be hearing about a Dutch property bubble if those 205,000 people actually lived in the Netherlands. In fact, just 2% of them do. The rest are scattered around the world. For tax purposes, measures like these saved the company $6.5 billion from 2010 to 2012. 

In 2013, the company paid a 15.6% overall global tax rate, which it attributed to a “more favorable [than] expected geographic mix” of revenues (auditor jokes are funny). That will have added to the $44 billion of untaxed cash the company had accumulated overseas by the end of 2012, though we don’t yet know by how much.

Public-policy concerns aside, what worries analysts, of course, is a company on a cost-cutting mission running out of costs to cut. When it’s doing so much of that through tax avoidance, it inevitably raises questions about how well the primary business is going. 

Read more: IBM saved its earnings by moving almost half its employees to the Netherlands - Quartz

Bloomberg: IBM to Cut Thousands of Jobs in Western Europe, Observer Says - by Grant Smith

For the complete report from Bloomberg.com click on this link

IBM to Cut Thousands of Jobs in Western Europe, Observer Says - by Grant Smith

plans to cut “thousands” of staff in the U.K., Germany and Ireland as it shifts jobs to eastern Europe, China, India and South America, the Observer reported. Job reductions have already been carried out in western Europe and more will be made within months, the newspaper said, citing Lee Conrad of Alliance@IBM, a network for company employees. Indian workers at the company earn about 10 percent of the amount paid to U.S. employees performing similar tasks, according to the newspaper.