IBM Earnings Rise 12.4%; Stock Falls on Tax Forecast

International Business Machines Corp. said today its earnings rose 12.4% in the fourth quarter and that it had trimmed its staff even more than expected through voluntary separation incentives.

The stock fell 75 cents a share at $123.12 1/2 a share in morning trading on the New York Stock Exchange, apparently because IBM told some analysts that its tax rate might be higher and its revenue lower in 1989 than the analysts had forecast.

The world’s largest computer company said it earned $2.35 billion, or $3.97 a share, up from $2.09 billion, or $3.47 a share, a year earlier. Revenue rose to $20 billion from $18.3 billion in the year-earlier period.

For all of 1988, IBM said its earnings rose 10.4% to $5.81 billion, or $9.80 a share, from $5.26 billion, or $8.72 a share, a year earlier. Revenue rose 8% to $59.7 billion from $55.3 billion.

Also today, Wang Laboratories Inc. said its earnings tumbled to $1 million, or 1 cent per share, in its second fiscal quarter, from $34.1 million, or 21 cents a share, a year earlier. The office-automation company said revenue fell to $760.7 million from $784.7 million a year earlier.

John F. Akers, IBM’s chairman and chief executive, said IBM benefited from increases in efficiency as well as positive response by customers to improved products “in every segment of our business.”

IBM said it recorded a gain of $220 million on payments from Fujitsu Ltd., its Japanese rival, under an arbitration order that ended a software copyright dispute.