The company’s first quarter earnings report stated that employee stock options had cut into earnings by 10 cents per share, notes the AP report. However, during a conference call on April 5, a chart put out by chief financial officer Mark Loughridge showed the actual cost of the options as 14 cents per share.
At question is whether the company intended to mislead analysts to downplay its weak quarterly earnings. The AP reported that IBM spokesman Ed Barbini declined to comment on that issue, saying only that Loughridge had made it clear in his conference that stock-option expenses would be lower in 2005 than in 2004.
After the investigation was announced, IBM’s share price fell another 88 cents following a 13 cent fall on Monday.