NEW YORK (Reuters) – IBM (IBM.N: Quote, Profile, Research, Stock Buzz) disappointed investors by reporting a decline in new technology services contracts in the second quarter, while a weaker euro hit revenue more than expected, sending its shares down more than 4 percent.

While firm growth in the company’s higher-margin software unit and sales in emerging markets bolstered profit, Monday’s results were not as good as investors had wanted to see from the world’s biggest technology services company.

Some analysts said International Business Machines Corp’s results may weigh on technology shares on Tuesday, dampening expectations that corporate IT spending was on the rebound following sterling numbers from Intel Corp (INTC.O: Quote, Profile, Research, Stock Buzz).

“Revenues were not as strong as people were expecting. There were some currency hits …. But even with that, it might have been a little bit weaker than people were expecting,” said Mark Demos, portfolio manager at Fifth Third Asset Management, an IBM shareholder.

“We’re coming out of the recession, and services signings is one of the indicators that people would like to see at least grow from year over year.”

IBM said its second-quarter revenue rose 2 percent to $23.7 billion. Analysts on average had expected $24.2 billion, according to Thomson Reuters I/B/E/S.

Big Blue blamed currency rates for reducing revenue by about $500 million in the quarter.

NEW YORK (Reuters) – International Business Machines Corp (IBM.N: Quote, Profile, Research, Stock Buzz) said Chief Financial Officer Mark Loughridge and senior executives Michael Daniels, Steven Mills and Virginia Rometty would be given broader responsibilities at the company, according to an internal memo obtained by Reuters.

Loughridge, 56, will hold on to his role as CFO, but will be given a broader role as senior vice president of “Finance and Enterprise Transformation,” the memo said.

Daniels, 56, and previously responsible for technology services in IBM’s global services group, is now head of the overall services group. Mills, 58, currently senior vice president and group executive of IBM’s software group, is now also responsible for its systems business.

Rometty, 52, and long considered a CEO candidate, is now responsible for marketing and strategy in addition to her previous role as senior vice president of global sales and distribution.

Reporting lines do not appear to have changed, and a spokesman of the world’s biggest technology services firm declined to comment on the memo.

But one IBM employee, who declined to be named, said the move made obvious where the next leadership would come from by elevating a few of its most senior executives.

Some analysts say Mills is too close in age to Palmisano, who turns 59 later this month, to be considered a likely successor. But Daniels and Rometty have long been strong candidates as the next CEO.

NEW YORK, July 19 (Reuters) – IBM (IBM.N: Quote, Profile, Research, Stock Buzz) disappointed investors by reporting a decline in new technology services contracts in the second quarter, while a weaker euro hit revenue more than expected, sending its shares down more than 4 percent.

While firm growth in the company’s higher-margin software unit and sales in emerging markets bolstered profit, Monday’s results were not as good as investors had wanted to see from the world’s biggest technology services company.

Some analysts said International Business Machines Corp’s results may weigh on technology shares on Tuesday, dampening expectations that corporate IT spending was on the rebound following sterling numbers from Intel Corp (INTC.O: Quote, Profile, Research, Stock Buzz).

“Revenues were not as strong as people were expecting. There were some currency hits …. But even with that, it might have been a little bit weaker than people were expecting,” said Mark Demos, portfolio manager at Fifth Third Asset Management, an IBM shareholder.

“We’re coming out of the recession, and services signings is one of the indicators that people would like to see at least grow from year over year.”

IBM said its second-quarter revenue rose 2 percent to $23.7 billion. Analysts on average had expected $24.2 billion, according to Thomson Reuters I/B/E/S. (IBM earnings graphic: link.reuters.com/ryb48m)

Big Blue blamed currency rates for reducing revenue by about $500 million in the quarter.

NEW YORK (Reuters) – IBM (IBM.N: Quote, Profile, Research, Stock Buzz) is in danger of missing average Wall Street estimates for its second-quarter revenue as the weaker euro dents sales in Europe, which counts for about 30 percent of its revenue.

While strong growth in software and services may bolster International Business Machines Corp’s second-quarter profit, the results on Monday are unlikely to trigger a share rally as investors hunt for higher-growth stocks such as Apple Inc (AAPL.O: Quote, Profile, Research, Stock Buzz) and VMware Inc (VMW.N: Quote, Profile, Research, Stock Buzz), analysts said.

“We’re into one year of a three-year tech recovery cycle, so I want to ‘overweight’ smaller and faster-growing companies — the speed boats, not the big tanker ships like IBM,” said Gleacher & Co analyst Brian Marshall.

“You have faster growth opportunities from guys like Apple, VMware, NetApp (NTAP.O: Quote, Profile, Research, Stock Buzz) and F5 Networks (FFIV.O: Quote, Profile, Research, Stock Buzz),” he said.

The average analyst forecast calls for IBM’s second-quarter revenue to have grown 4 percent to $24.20 billion, according to Thomson Reuters I/B/E/S. (See link.reuters.com/zuj97m for comparison to other companies mentioned in this story.)

Some analysts said that average estimate did not sufficiently reflect a 9 percent rise in the dollar against the euro during the quarter.

Bernstein Research’s Toni Sacconaghi recently lowered his revenue estimate to $23.8 billion from $24.3 billion, taking into account the euro’s decline. Stifel Nicolaus analyst David Grossman also forecast $23.8 billion.

NEW YORK (Reuters) – Cisco Systems Inc (CSCO.O: Quote, Profile, Research, Stock Buzz) and Juniper Networks Inc (JNPR.N: Quote, Profile, Research, Stock Buzz) are set to report solid quarterly sales, but an aggressive battle to win contracts may be jeopardizing margins for the network equipment makers.

Analysts say Cisco is lowering prices on routers and other equipment that helps phone carriers and others handle Internet traffic. The rising popularity of overseas rivals like France’s Alcatel-Lucent (ALUA.PA: Quote, Profile, Research, Stock Buzz) and China’s Huawei Technologies HWT.UL is seen adding to the pressure.

One key problem is that carriers like AT&T Inc (T.N: Quote, Profile, Research, Stock Buzz) want to buy more wireless network equipment and other gear to handle the explosive growth in mobile Internet traffic, but their revenues aren’t growing enough to support bigger spending.

“I do think it’s an ongoing issue. It’s a very competitive environment and Alcatel, Huawei … they’re all companies that have much lower gross margins,” said Michael Genovese, an analyst at Soleil Securities.

Cisco and Juniper’s margins have lately hovered above 65 percent, compared with Alcatel-Lucent’s 34 percent.

While Cisco has already signaled the possibility of lower margins as it expanded into new areas like consumer products and data center servers, Juniper has been more upbeat about improving profitability.

“I do think Juniper will have to come out and lower — not hugely — but still lower its gross margin targets,” Genovese said.

NEW YORK (Reuters) – Tyco Electronics Ltd (TEL.N: Quote, Profile, Research), has agreed to buy broadband equipment maker ADC Telecommunications Inc (ADCT.O: Quote, Profile, Research) for $1.25 billion in cash, betting on future demand for fiber optics and diversifying away from its historical automotive connector business.

Tyco Electronics said it would pay $12.75 cash per share, a 44 percent premium to ADC’s closing price on Monday.

It said the deal would help it expand in the market for consumer electronics like smart phones, 3D television and video-conferencing. It said the deal would boost earnings by 14 cents per share in the first full year after closing.

Barclays Capital was the sole financial adviser to Tyco Electronics. Morgan Stanley advised ADC.

The deal is expected to be completed in the fourth calendar quarter, Tyco Electronics said. ADC would be required to pay a $38 million termination fee, according to an SEC filing.

“It’s a smart deal,” said telecommunications equipment analyst Lawrence Harris of C.L. King. “The fiber-optic connectivity space is an area that’s going to experience growth in the next several years.”

ADC shares jumped $3.68, or 42 percent, to $12.53 on the Nasdaq. Tyco Electronics gained $1.09, or 4.4 percent, to $26.37 on the New York Stock Exchange.

NEW YORK (Reuters) – Technology outsourcing and consulting firm Accenture Plc reported higher-than-expected quarterly results on Thursday as a recovering economy encouraged companies to invest again.

Accenture’s revenue for the fiscal third quarter ended May 31 rose to $5.57 billion from $5.15 billion a year earlier. That was above analysts’ average forecast of $5.46 billion, according to Thomson Reuters I/B/E/S.

The company’s shares rose 2.3 percent after the earnings report to $38.41. They had closed down 1.6 percent at $37.55 on the New York Stock Exchange.

Although the company gave a tepid outlook due to a stronger U.S. dollar, analysts said new bookings, a key indicator of future sales, appeared healthy at $6.43 billion, with a good balance between its consulting and outsourcing business.

Accenture specializes in helping companies cut costs and improve operations through consulting, technology services and outsourcing.

While its sales forecast for the current quarter was below most analysts’ forecasts and the company warned that full-year revenue would be at the lower end of its previous forecast due to foreign exchange rates, investors focused on the improvement of the past quarter.

“The outlook was a bit lower than the Street was expecting, but a lot of this is due to currency, and investors were braced for that,” said Andrew Miedler, analyst at Edward Jones.

AUSTIN, Texas/NEW YORK (Reuters) – Dell Inc (DELL.O: Quote, Profile, Research) forecast a 14 to 19 percent jump in fiscal 2011 revenue as consumer and corporate spending returns, matching Wall Street’s expectations, but investors are focusing on whether the world’s No. 3 PC maker can sustain margins.

Investors are likely to quiz executives at Dell’s annual financial analysts’ conference on Thursday about whether it can shore up profitability after gross margins fell short of expectations in its fiscal first quarter, reflecting a reliance on sales of hardware to U.S. businesses.

The PC manufacturer, which has steadily conceded market share to Hewlett-Packard (HPQ.N: Quote, Profile, Research) and Acer Inc (2353.TW: Quote, Profile, Research) in past years — has also been squeezed between higher costs for components such as memory, sliding prices for computers amid intense competition.

Shares in the company, once the world’s top maker of personal computers, dipped 0.5 percent in after-hours trade to $13.75. It posted a gross margin of 17.6 percent in the quarter ended April 30.

“We believe Dell intends to maintain gross margins in the range of 18 percent, though consistency has proved to be a challenge,” BMO Capital Markets wrote in a client note.

Dell forecasts that its revenue for the 2011 fiscal year will grow 14 percent to 19 percent from the previous year as more customers buy new computers after holding back during the economic downturn. The outlook confirmed a long-awaited recovery in technology spending.

CEO Michael Dell said on Wednesday that the company — which has not provided a formal financial outlook since 2006 — felt more comfortable providing a forecast now that the economy had settled down.

NEW YORK (Reuters) – Cisco Systems Inc Chief Executive John Chambers, one of Silicon Valley’s longest-serving executives, said he recently committed to another three to five years in his role.

Chambers, who took the CEO role in 1995 and is 60 years old, said the company held a board of directors’ meeting a couple of days ago where he was asked to renew his commitment.

“I love what I’m doing. I’m in,” he told a Sanford C. Bernstein conference in New York on Friday.

He also said there were several executives within the company he thought were capable of succeeding him.

“You begin to look at the players across the board. I have six or seven that could be my successor in three to five years,” he said.

Chambers is widely credited for growing the router maker into one of the country’s top technology firms through aggressive sales strategies and a series of acquisitions in new areas like consumer products and video technology.

Since he became CEO, Cisco has grown from a company with $1.2 billion in annual revenue to around $40 billion.

NEW YORK (Reuters) – Hewlett-Packard Co said it aims to boost margins by cutting jobs and reallocating spending to more profitable technology services, shrinking its workforce by a net 3,000 jobs, or 1 percent, over three years.

The move, which will result in a $1 billion charge, comes as rivals like IBM and Cisco Systems Inc vie for supremacy in the lucrative business of fitting out and helping run corporate data centres that handle communications and store huge amounts of information.

HP made a major expansion into technology services with its $14 billion acquisition of EDS in 2008, and it said Tuesday’s announcement was a further attempt to bolster its enterprise business.

“Over the past 20 months, we focused on integrating EDS and improving profitability,” said Tom Iannotti, senior vice president and general manager of HP’s Enterprise Services. “Now that the integration is largely complete, we have identified significant opportunities to grow and scale the business.”

HP plans to cut 9,000 jobs over three years as it shuts down older data centres. But it will also add 6,000 new positions over the same period as it invests in more advanced data centres and expands its global operations.

The company currently has about 304,000 employees worldwide and is the world’s largest technology company by sales.

HP said the new data centres will feature more powerful computers that help customers run complex applications, and introduce more automated infrastructure. Most of the new hires will be in sales and services, it said.