IBM Forms New Group, Shuffles Executives

International Business Machine Corp. announced a reorganization of some of its major lines of business, a day after reporting earnings that met expectations on Wall Street. The world’s largest computer maker said it is creating a new unit that will include its personal computer, network computer and consumer operations because the distinctions among the businesses have grown blurred. Network computers are low-cost machines meant to operate more cheaply than PCs. Sam Palmisano, general manager of IBM PC Co., was named senior vice president to head the new group. The move is the latest by Chairman and CEO Louis Gerstner in his continuing overhaul of IBM to help it cope in an increasingly competitive and fast-changing industry. Armonk, N.Y.-based IBM shares declined 75 cents to close at $103 on the New York Stock Exchange. Its earnings rose 7.7% to $1.4 billion, or $1.46 a share, in the second quarter, from $1.3 billion, or $1.26 a share, a year earlier.