Weak IBM Earnings Report Expected--but How Weak?

International Business Machines Corp. will announce its fourth-quarter earnings Tuesday, a report that will include almost $7 billion in restructuring charges and may show IBM with its first quarterly operating loss ever.

Analysts who follow Big Blue say, however, that they are more concerned with the tone and the outlook the world’s largest computer maker gives Wall Street for the first quarter of this year and beyond.

According to First Call, a Wall Street information service, the consensus among analysts is for IBM to report an operating loss of 1 cent a share, with estimates ranging from a loss of 50 cents a share to a profit of 10 cents.

These estimates exclude the restructuring charges, which are estimated at about $9.20 a share.

Last month, when the computer behemoth unveiled one of the biggest corporate restructurings in its history, it also said it would likely report break-even earnings for the fourth quarter.

“I will be shocked if it is good news,” said Stephen Smith, a Paine Webber Inc. analyst. “I am (expecting) . . . break-even. That is probably the best-case scenario. The issue is going to be how bleak a picture they paint for (the first quarter).”

IBM will take a $6-billion charge in the fourth quarter for its restructuring and for the cost of shedding another 25,000 employees in 1993.

It will also write down about another $1 billion in the quarter for cutting manufacturing capacity and some head count reductions in 1992.

Analysts said that if IBM reports an operating loss on the low-end of the range, where Merrill Lynch analyst Dan Mandresh has the lowest estimate--a loss of 50 cents a share--IBM’s stock could perhaps dip even farther than it has recently.