1. UPDATE 4-IBM’s Q3 disappoints, stock drops


    * Stock dips after-hours as economy worries weighBy Noel RandewichSAN FRANCISCO, Oct 17 (Reuters) - IBM’s quarterly results failed to impress investors used to a stellar showing from Big Blue, adding to concerns about lackluster corporate IT spending and dragging its stock down more than 3 percent.The company’s earnings beat forecasts and it increased its 2011 earnings-per-share outlook but it faced a high hurdle after recent strong reports from Oracle and Accenture , and analysts focused on slower expansion in key regions and businesses.Further stoking worries about IT spending, business software maker VMware Inc posted quarterly profit above expectations but warned of uncertainty among some of its corporate customers in Europe.”We have seen a bit more scrutiny and higher levels of approval required. Particularly with larger deals where they would go for CFO and CEO approval, where in the past we may not have seen those approvals to be necessary,” said VMWare Chief Financial Officer Mark Peeking.IBM, an information technology hardware bellwether with a global clientele, said total services signings — an indicator of future growth — climbed to $12.3 billion in the third quarter, in line with expectations.”The growth rates IBM experienced in each of the regions — Americas, Europe and Asia — are all decelerating and the public sector is exhibiting no growth,” said Shebly Seyrafi, an analyst at FBN Securities. “I wouldn’t say we’re falling off a cliff, but there is a slowing in IT spending.”Revenue rose 8 percent to $26.16 billion, marginally softer than the average forecast of $26.26 billion.Buttressed by recurring revenue that helps keep IBM’s results steady in strong and weak economies, its shares have outperformed the market and hit a record high on Friday. They are up about 28 percent this year versus the Standard & Poor’s 500 index’s 4 percent dip.On Monday, International Business Machines Corp’s stock fell 3.7 percent to $179.70 in extended trade after closing down 2.1 percent on the New York Stock Exchange.”The company exceeded published expectations, but the underlying expectations were even higher,” Annex Research analyst Bob Djurdjevic said. “Investors who have been very bullish on IBM are probably taking some profits now.”RISING CLOUDU.S. economic concerns and a worsening European financial crisis have hurt consumer demand. Companies such as IBM that sell hardware and software for data centers powering the Internet have remained resilient.IBM said revenue from cloud computing in the first nine months of this year was twice as much as in full-year 2010.Adjusted for currency, IBM’s revenue from the Americas rose 6 percent in the quarter, with Europe, Africa and the Middle East flat, and Asia up 1 percent.IBM also derives a major portion of its revenue from government spending and the financial services industry — both hit hard by widening fiscal deficits and crumbling markets, respectively.IBM has consistently beaten Wall Street forecasts. In the second quarter, it trounced expectations with signings of new business surging 16 percent. At the time, that stellar performance raised hopes that 2011 would be a good year for overall tech-spending.On Monday, it raised its full-year diluted earnings forecast to at least $13.35 per share, from its prior estimate of at least $13.25. Analysts had expected $13.32, according to Thomson Reuters I/B/E/S.IBM reported a third-quarter profit, excluding items, of $3.28 per share, up 15 percent year over year and above expectations of $3.22.”Whatever IBM could control, they did a great job. But they are not immune to macro conditions. Financial conditions are tough,” said Global Equities Research analyst Trip Chowdhry.”People don’t want to cancel projects, but projects are getting delayed. Sales cycles are getting elongated. New projects are getting smaller budgets.”Despite uncertainty in the fourth quarter and 2012, some portfolio managers remained confident in IBM’s ability to weather a tougher global environment.”IBM’s business has a degree of resiliency to it. The company has maintenance agreements that generate recurring revenue, giving us more visibility on future results,” Wirtz said.

  2. Obama recruits more big cash donors for re-election


    By Kim Dixon and Eric JohnsonWASHINGTON/CHICAGO, Oct 14 (Reuters) - The number of donors who raise big money for President Barack Obama jumped in the last three months as he builds a war chest for what will likely be the costliest presidential election ever.At least forty-one people have raised at least half a million dollars for the president, compared to 27 in Obama’s first report, according to an analysis of campaign data released on Friday.The big donors, known as “bundlers,” are typically well-connected people who pledge to gather tens of thousands of dollars for a candidateFormer Goldman Sachs executive Jon Corzine and Dreamworks Animation chief executive executive Jeffrey Katzenberg are on Obama’s elite list and raised $500,000 or more.The president’s campaign finance report shows he can still pull in major cash despite a stagnant economy, dipping approval ratings and grumblings among some liberal supporters that he has not done enough for their cause.While still keeping ties to his famed small donor operation, Obama is relying heavily on major donors early on to finance a campaign that is likely to break records in spending, according to Anthony Corrado, a campaign finance expert at Colby College.”The emphasis has been on doing larger dollar fundraising events particularly asking for $2,500,” Corrado said. “Events like this help him to raise substantial amounts of money for the campaign allowing him to exceed his pace for 2007.”Obama and the Democratic National Committee have raised more than $150 million so far for his bid for a second term, far outstripping Obama’s Republican rivals. Bundlers raised about a third of that haul.Earlier on Friday, Republican Mitt Romney posted $14 million for the quarter, second to fellow Republican Texas Governor Rick Perry’s $17 million. Obama’s comparable fundraising figure for the three months was $43 million.Obama voluntarily releases a list of bundlers. No other major candidate has done so.The president regularly brings in more than $1 million in a single evening of fundraising, as supporters donate the legal maximum of $35,800 to his campaign and the Democratic party for the chance to have dinner and take a picture with the president.UBS executive Robert Wolf and hedge fund executive Orin Kramer are also big Obama fundraisers.SMALL DONORSAt least 40 percent of all the money raised by the Obama campaign and the Democratic National Committee last quarter came from those giving in increments of $200 or less.The Obama campaign has been touting its connections to mainstream Americans who send smaller checks, calling itself a grassroots effort.”They are still doing well with small donors,” said Darrell West, director of governance studies at the Brookings Institution, a thank tank.The campaign said that in the third quarter about 600,000 people donated to the campaign.Much has been made of dipping support among Wall Street for Obama. Some financial executives, including hedge fund managers, have complained about Obama’s tax and financial regulation policies and his comments about the wealthy, at times calling them “fat cats.”In the second quarter, more Wall Street money did flow to Romney, who has deep ties there. Still, Obama boosted the number of bundlers with Wall Street ties in that period.But fundraising prowess doesn’t guarantee victory for the incumbent, who is fighting for re-election amid a economic stagnation and high unemployment.”Every bit of news like this gives people a certain degree of confidence that they are on the right train,” said Paul Gray, a Chicago art dealer who is raising money for Obama.”But the most compelling kind of data that we could receive right now is positive financial data about the U.S. economy.”

  3. Obama recruits more big cash donors for re-election


    By Kim Dixon and Eric JohnsonWASHINGTON/CHICAGO, Oct 14 (Reuters) - The number of donors who raise big money for President Barack Obama jumped in the last three months as he builds a war chest for what will likely be the costliest presidential election ever.At least forty-one people have raised at least half a million dollars for the president, compared to 27 in Obama’s first report, according to an analysis of campaign data released on Friday.The big donors, known as “bundlers,” are typically well-connected people who pledge to gather tens of thousands of dollars for a candidateFormer Goldman Sachs executive Jon Corzine and Dreamworks Animation chief executive executive Jeffrey Katzenberg are on Obama’s elite list and raised $500,000 or more.The president’s campaign finance report shows he can still pull in major cash despite a stagnant economy, dipping approval ratings and grumblings among some liberal supporters that he has not done enough for their cause.While still keeping ties to his famed small donor operation, Obama is relying heavily on major donors early on to finance a campaign that is likely to break records in spending, according to Anthony Corrado, a campaign finance expert at Colby College.”The emphasis has been on doing larger dollar fundraising events particularly asking for $2,500,” Corrado said. “Events like this help him to raise substantial amounts of money for the campaign allowing him to exceed his pace for 2007.”Obama and the Democratic National Committee have raised more than $150 million so far for his bid for a second term, far outstripping Obama’s Republican rivals. Bundlers raised about a third of that haul.Earlier on Friday, Republican Mitt Romney posted $14 million for the quarter, second to fellow Republican Texas Governor Rick Perry’s $17 million. Obama’s comparable fundraising figure for the three months was $43 million.Obama voluntarily releases a list of bundlers. No other major candidate has done so.The president regularly brings in more than $1 million in a single evening of fundraising, as supporters donate the legal maximum of $35,800 to his campaign and the Democratic party for the chance to have dinner and take a picture with the president.UBS executive Robert Wolf and hedge fund executive Orin Kramer are also big Obama fundraisers.SMALL DONORSAt least 40 percent of all the money raised by the Obama campaign and the Democratic National Committee last quarter came from those giving in increments of $200 or less.The Obama campaign has been touting its connections to mainstream Americans who send smaller checks, calling itself a grassroots effort.”They are still doing well with small donors,” said Darrell West, director of governance studies at the Brookings Institution, a thank tank.The campaign said that in the third quarter about 600,000 people donated to the campaign.Much has been made of dipping support among Wall Street for Obama. Some financial executives, including hedge fund managers, have complained about Obama’s tax and financial regulation policies and his comments about the wealthy, at times calling them “fat cats.”In the second quarter, more Wall Street money did flow to Romney, who has deep ties there. Still, Obama boosted the number of bundlers with Wall Street ties in that period.But fundraising prowess doesn’t guarantee victory for the incumbent, who is fighting for re-election amid a economic stagnation and high unemployment.”Every bit of news like this gives people a certain degree of confidence that they are on the right train,” said Paul Gray, a Chicago art dealer who is raising money for Obama.”But the most compelling kind of data that we could receive right now is positive financial data about the U.S. economy.”

  4. Berlusconi faces confidence vote; seen surviving for now


    Berlusconi was forced to call the vote, to be held in the Chamber of Deputies early afternoon, after his divided center-right government suffered a major embarrassment when it failed to pass a routine budget provision on Tuesday.He is seen surviving for now, just as he has survived many such votes, because squabbling factions in his coalition are still not ready to replace him.”If a group of deputies inside his People of Freedom party had a precise strategy then probably Berlusconi’s days would be numbered, but we are not there yet,” political commentator Sergio Romano told Reuters.Analysts say even if the 75-year-old premier wins, it will be a matter of months only before a new crisis hits, and the country is likely to hold elections next spring, a year early.Berlusconi told parliament on Thursday the fall of his government would be “a victory for those who want to see (Italy) fall into decline, catastrophe and the kind of speculation we have seen for months in Europe and Italy.”Many analysts see the opposite as true, and see Berlusconi’s ineffectiveness in the face of crisis bringing either snap elections or an unelected government of technical experts —preferable to the current malaise.Nicholas Spiro, head of debt consultancy firm Spiro Sovereign Strategy, said a “Berlusconi premium” has been built into Italy’s borrowing costs.His political demise “could trigger a favorable re-assessment of Italy in the minds of international investors, particularly if a non-partisan technocratic cabinet took office,” Spiro said.DISSENTERSA number of center-right deputies were absent from Tuesday’s vote, infuriating Berlusconi and feeding suspicions that some stayed away to raise their bargaining power in the coalition.On Thursday, Berlusconi described the episode as an “accident” and insisted the center-right bloc was united.He is facing internal challenges from a number of ministers, most notably form Economy Minister Giulio Tremonti, who are unhappy with his leadership and the damage his personal and legal woes have done to Italy’s reputation.The prime minister is on trial in four separate cases, accused of fraud, corruption and paying for sex with a minor.President Giorgio Napolitano entered the fray this week, expressing deep concern about the viability of government and demanding a “credible response” to Italy’s acute problems.A Reuters survey of about 20 analysts said on Thursday that Italy is already in recession, will barely muster any growth in 2012 and will miss the government’s fiscal deficit targets.Its sovereign debt has been downgraded in the last month by Standard & Poors, Moody’s and Fitch, and since early August it has relied on the European Central Bank to buy its bonds to prevent yields rising to unsustainable levels.

  5. UPDATE 1-Alcoa Q3 profit up, but sees slower growth


    * Profit and sales slip from Q2Oct 11 (Reuters) - Alcoa Inc , the largest U.S. aluminum producer, said third-quarter profit jumped from a year ago, but earnings and revenue slipped from the second quarter as economic growth slowed from the first half of this year.Net earnings were $172 million, or 15 cents per share, compared with $61 million, or 6 cents per share, a year earlier, the Pittsburgh-based company said on Tuesday.Income from continuing operations was also 15 cents per share, but down from 28 cents per share in the second quarter.Revenue rose 21 percent to $6.4 billion from a year earlier, but was 3 percent lower than the second quarter of this year as metals prices slumped sharply.Aluminum prices fell almost 20 percent in the third quarter on global economic concerns and Alcoa’s share price fell 41 percent during the same period.