Continued problems from customers leasing more computers than they buy spurred an 18 percent decrease in International Business Machines Corp.'s third-quarter earnings, the company announced yesterday.
The computer giant said it earned $669 million ($1.14 per share) in the third quarter, compared with $816 million ($1.39) in the year-earlier quarter. IBM said gross income from sales was $2.07 billion compared with $2.18 billion in the 1978 third quarter, while gross income from rentals and servicts was $3.31 billion compared with $3.10 billion.
IBM said its 1978 third-quarter per-share profit was adjusted for the company's 4-for-1 stock split May 10 of this year.
IBM Chairman Frank T. Cary said, "The shift in the proportion of customers deciding to lease, rather than purchase (equipment) has continued. Purchases in the third quarter were significantly lower than the comparable 1978 period, when purchase activity was accelerating toward fourth-quarter peak."
"As has been indicated in the past, substantial shifts in the level of such purchases can materially affect short-term operating results," Cary said, "because income from purchaces is realized immediately while lease income is taken into earnings over a period of time."
In the first nine months of this year, IBM had net income of $2.00 billion ($3.43) compared with $2.10 billion ($3.58) in the first three quarters of 1978. Nine-month gross income from sales was $6.21 billion, compared with $5.57 billion, while gross income from rentals and services was $9.82 billion compared with $9.07 billion in the comparable 1978 period.
Occidental Petroleum, first of the major oil companies to report results for the third quarter, earned a record $2.44 a share against only 15 cents a year ago.
Net income was $186 million on sales of $2.6 billion, up from $19 million on sales of $1.7 billion a year ago.
Nine-month profit was $375 million ($4.85) on sales of $6.7 billion, contrasted to a loss of $16 million a year earlier on sales of $4.5 billion.
Chairman Armand Hammer said Occidental's fertilizer chemical trading agreement with the Soviet Union has contributed more than $40 million in operating profit since 1973.
Growth from its international operations and a tax credit helped Collgate-Palmolive Co. report a 5 percent increase in third quarter earnings over the year-earlier quarter, the company announced yesterday.
The diversified consumer products concern said it earned $51.1 million (63 cents) compared with $48.5 million (60 cents) in the third quarter of 1978. Sales rose 12 percent to $1.22 billion from $1.09 billion.
Company chairman and chief executive officer Keith Crane said the 1970 results included an $11.5 million reversal of prior years' tax provisions, reflecting United Kingdom legislation concerning inventory stock relief.
Excluding the tax credit, third quarter earnings declined, due to heavy losses by the Helena Rubinstein unit and heavy promotional spending for new products, Crane said.
For the first nine months, Colgate-Palmolive earned $140.4 ($1.72) compared with $133.1 million ($1.63) in last year's first three quarters. Sales rose 13 percent to $3.58 billion compared with $3.17 billion.
PPG Industries Inc. reported third quarter earnings rose to $56.3 million ($1.74) from $45.6 million ($1.44) in the same period a year ago.
Sales for the quarter increased 11.3 percent to $784.3 million, from $704.7 million.
For the nine-month period, PPG said it earned $163.8 million ($5.09) compared with $131.5 million ($4.18). Sales rose to $2.29 billion from $2.06 billion.
Blaming this summer's gas lines on a decline in customers at its restaurants, Howard Johnson's Co. reported yesterday earnings slumped slightly during its third quarter.
The restaurant-hotel chain reported third quarter sales of $164.6 million, compared with sales of $163.1 in 1978. But net income dropped to $12.3 million compared with $14 million in 1978. Per-share earnings were 56 cents compared with 64 cents in 1978.
The third quarter report brought sales for the year to $447.6 million, up 5 percent from $425.5 million in 1978. Earnings for the first nine months stood at $29.2 million ($1.32) compared with $28.8 million ($1.31) for the first three quarters of 1978.