11 November 2014

IBM Won’t Give Exact EPS Goal After Ditching Forecast - Bloomberg

IBM Won’t Give Exact EPS Goal After Ditching Forecast - Bloomberg: "Financial"

After killing the careers of thousands, they abandoned the plan.

International Business Machines Corp. (IBM) doesn’t plan to lock itself into another precise earnings forecast after ditching its long-held goal for 2015 profit.
Chief Financial Officer Martin Schroeter said IBM is unlikely to put in place another “absolute” earnings-per-share roadmap. He said there’s still value in laying out the complex company’s strategy for investors.
“We are going to have to be as transparent as we have been about the business and what it can earn over time,” Schroeter said today at an RBC Capital Markets investor conference.
Last month, IBM Chief Executive Officer Ginni Rometty tossed out the company’s goal to reach $20 a share in adjusted earnings by 2015 after sales dropped for a 10th straight quarter and demand for servers and other hardware dwindled. Rometty, who took over in 2012, had been trying to transform IBM while adhering to the five-year profit forecast laid out by her predecessor, Sam Palmisano.
The company has said it will provide an update on its financial projections in January.
IBM is under pressure to manage through a shift in corporate spending that has been a drag on revenue. Technology customers are increasingly moving data and software to the cloud, instead of on-site servers, lessening the demand for IBM hardware and the sales and maintenance staff who support it. The company has said it expects adjusted profit to fall this year for the first time since 2002.

Cloud Growth

To help accelerate that move, IBM is creating a separate business unit for its cloud-computing operations. Last month, IBM said that cloud offerings delivered as a service are at an annual run rate of $3.1 billion, compared with $2.8 billion as of the second quarter. That’s still a fraction of IBM’s $100 billion in revenue last year.
Schroeter today said the company still expects about $7 billion in cloud-related sales next year, with $3 billion of that coming from new offerings and the rest from old products shifted to be delivered via the cloud.
While IBM has used deals to bolster its cloud portfolio, Schroeter said he expects to fall short of the projection for $20 billion in acquisitions laid out in 2010. The technology giant isn’t looking to do a large, transformative takeover, Schroeter said today.

Acquisition Strategy

“We buy things to enhance what IBM can become,” he said. “So we’re not looking to be something else through an acquisition.”
IBM is trying to streamline itself to improve speed and agility, Rometty said in a memo to workers last month. The company has fired and furloughed employees, taking more than $1 billion in workforce restructuring charges this year. IBM has said it plans to cut more jobs, resulting in a fourth-quarter charge of as much as $600 million.
IBM shares fell 0.2 percent to $163.22 at 1:40 p.m. New York time. The stock was down 13 percent this year through yesterday.

22 October 2014

Meanwhile, This Is Who Is Quietly Buying All The Cheap Oil | Zero Hedge

Meanwhile, This Is Who Is Quietly Buying All The Cheap Oil | Zero Hedge:

With the US Shale Oil industry up in arms, Venezuela screaming, and Russia awkwardly quiet (as the Ruble slides with the falling oil price stabilizing domestic inflows)the 'secret' Saudi-US oil deal that pressured prices for crude down to $80 (18-month lows today) has 'hurt' a lot of the world's producer nations. However, as Bloomberg reports, there is one nation that is very grateful. The number of supertankers sailing toward China’s ports surged to a nine-month high as over 80 very large crude carriers (VLCCs) - the industry’s biggest ships - sail toward the Asian country’s ports. At an average of 2 million barrels each, the 160 million barrels will help refill China's 727 million barrel SPRwhich it started in 2012.

There are 89 tankers sailing for Chinese ports, 80 of which are VLCCs - the highest since January 3rd.

The number of supertankers sailing toward China’s ports surged to a nine-month high amid speculation an oil-price slump is encouraging the world’s second-biggest crude importer to accelerate purchases.

There are 80 very large crude carriers, the industry’s biggest ships, sailing toward the Asian country’s ports, according to IHS Fairplay vessel-tracking signals compiled by Bloomberg at about 10 a.m. today. That’s the highest since Jan. 3. Average shipments are 2 million barrels.

Brent crude, the global benchmark, plunged to a four-year low yesterday amid speculation Saudi Arabia, Kuwait and other nations in the Organization of Petroleum Exporting Countries won’t curb production. The slump is likely encouraging buying to fill China’s strategic stocks, according to Energy Aspects Ltd., a London-based consultant.

“There’s a lot of bargain hunting going on,” Richard Mallinson, an analyst at Energy Aspects, said by phone. “Whilst prices are low we think there’ll be buying for Strategic Petroleum Reserve filling and also just trying to capture these discounted crudes.”


The 80 bound for China compare with an average of 63 for the past two years and match a record in data that started in October 2011.
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In summary, just like Chinese gold imports rise when the price of gold drops; so China does the logical thing with other commodities, (i.e. oil) when prices tumble and instead of selling into the paper rout, it buys all the physical it can get its hands on.

22 September 2014

Why I Hope to Die at 75

Why I Hope to Die at 75 - The Atlantic

It's a great article and you should read it. I didn't include the article here because it's a large article.

Oh, and I think 75 may be a bit high for me, but I'm not decided yet.