IBM Chairman Expects 4th Quarter to Be Best This Year

International Business Machines Chairman John F. Akers said in Tokyo on Thursday that the company’s severe profit slump was clearly in the past and he believed that the fourth quarter will be the strongest in 1991.

“The worst is behind us. Our performance bottomed out in the summer, and I believe this fourth quarter will be the strongest for the year,” he said.

Analysts detected a new tone in Akers remarks. “That’s the first time he’s had anything positive to say about the outlook this year,” said Robert Caputo, director of research at Swiss Bank Corp.

IBM’s best quarter so far was the third, in which it earned $172 million. But even those earnings were down 85% from last year’s levels.

IBM stock jumped $3.25 per share to close at $99.875 on the New York Stock Exchange in response to the positive earnings comment and the official announcement Thursday of a 10-year technology development pact between IBM and Intel Corp. that will provide Big Blue with access to the latest computer chips.

Also on Thursday, Akers warned in Tokyo that the computer giant might assemble more portable models in Japan if a new tariff intended to help U.S. industry is not lifted.

Essentially, one of America’s leading companies was threatening to boost the trade surplus of America’s most feared rival, Japan, if the Bush Administration doesn’t drop an effort to nurture U.S. computer parts makers.

The dispute centers on the flat-panel screens used in laptop and notebook computers, a Japanese-dominated sector that IBM has been late to join.