Lenovo Might Make Bid for IBM's Server Unit
Shares on International Business Machines (NYSE: IBM) are lower on the session following Q1 results issued Thursday night. EPS of $3 and revs of $23.4 billion compared with consensus estimates calling for EPS of $3.05 and revs of $24.7 billion.
However, there might be a little relief on the way. Reports out today suggest that PC giant Lenovo Group might be in discussions to buy IBM's server division. The unit might fetch anywhere from $2.5 billion to $4.5 billion, depending on the combination of assets and liabilities included in the deal.
One Sanford analyst thinks the deal might be a boon for both as IBM and Lenovo. Lenovo jettisoned to the top of the global PC business with the acquisition of IBM's PC assets in 2005, so integration of the server unit would make sense. Low-cost servers would be a key growth point for Lenovo.
In addition, IBM reported that System X revs -- which sells its servers -- fell 9 percent in the most recent quarter, a drag on the company as a whole.
Shares are down about 5 percent early Friday.
However, there might be a little relief on the way. Reports out today suggest that PC giant Lenovo Group might be in discussions to buy IBM's server division. The unit might fetch anywhere from $2.5 billion to $4.5 billion, depending on the combination of assets and liabilities included in the deal.
One Sanford analyst thinks the deal might be a boon for both as IBM and Lenovo. Lenovo jettisoned to the top of the global PC business with the acquisition of IBM's PC assets in 2005, so integration of the server unit would make sense. Low-cost servers would be a key growth point for Lenovo.
In addition, IBM reported that System X revs -- which sells its servers -- fell 9 percent in the most recent quarter, a drag on the company as a whole.
Shares are down about 5 percent early Friday.