John R. Opel, chief executive of International Business Machines Corp., told stockholders today that the giant computer company's goal is to compete in the information industry "in all of its aspects."
With the end of the government's 12-year-long antitrust case against IBM in January, the company appears to be moving harder into new markets--and to be more willing than before to discuss its strategies. Opel's remarks at the IBM annual meeting were a notable departure from IBM's traditional reluctance to disclose its long-range plans, a hesitancy that many industry observers said had intensified during the antitrust trial.
Now the company is making clear that it intends to compete in a variety of new fields ranging from its personal computer and other consumer products to videotex systems such as one recently sold for $22.5 million to the Federal Republic of Germany.
"IBM today has a variety of related businesses within the company, and with them we intend to compete across the industry throughout the decade," Opel said.
Opel pointed out that the company has spent $7.9 billion on research and development and $9.2 billion on plant and other capital expenditures over the past six years. The company said it is maintaining its quarterly dividend of 86 cents a share, and in response to a stockholder's question, Opel defended IBM's allocation of earnings between shareholder dividends and future development. More than 61 percent of its earnings are paid out as dividends, he said.
He also said that IBM's businesses cross the lines of virtually all computer-related fields such as large and small computer systems, personal computers and software. "All are quick on their feet," he said and, referring to the problems faced by some companies in raising cash, Opel noted that all IBM operations are "soundly financed internally."
Opel called the government's decision to drop the antitrust case against IBM a "great victory."
"All of our legal victories confirmed what objective observers have been saying for years . . . that our industry not only is highly competitive, it is one of the most innovative in the world in serving its customers, which, after all, is what competition is all about," he said.
In a brief exchange with reporters, Opel was asked about a hearing set for May 19 by U.S. District Court Judge David N. Edelstein to consider charges that Assistant Attorney General William Baxter had ties to IBM before Baxter entered government service. Edelstein presided over the IBM case and has been critical of Baxter's decision to drop it.
"That hearing has nothing to do with the case," Opel said. "It has to do with Mr. Baxter."
On financial matters, Opel said that a drop in per-share profits last year at IBM was due primarily to the effects of a strong dollar on its foreign business. Although IBM's sales rose by almost 11 percent last year, profits fell from $6.10 a share to $5.63, since IBM's total revenues were cut by $2 billion and profits by more than $600 million because of currency translations.