IBM Reports Record Revenue

Profit margin up 47.9%

IBM announced on Jan. 21 fourth-quarter 2008 income of $4.4 billion compared with $4 billion in the fourth quarter of 2007, an increase of 12%. Total revenues for the fourth quarter of 2008 of $27 billion decreased 6%.

The company's total gross profit margin was 47.9% in the 2008 fourth quarter compared with 44.9% in the 2007 period.

"A strong fourth quarter capped an outstanding year. In 2008 IBM performed well in an extremely difficult economic environment. Clearly our strategic transformation --- migrating to the more profitable segments of the industry, investing in growth regions of the world, and driving productivity through global integration --- is continuing to pay dividends," said Samuel J. Palmisano, IBM chairman, CEO.

"With our strong financial position, solid recurring revenue and profit streams and global reach, we are confident about 2009 and, based on our 2008 performance, we are ahead of pace on our roadmap for $10 to $11 per share." IBM said that it expects full-year 2009 earnings of at least $9.20 per share.

From a geographic perspective, the Americas' fourth-quarter revenues were $11.5 billion, a decrease of 2% (up 2%, adjusting for currency) from the 2007 period. Revenues from Europe/Middle East/Africa were $9.5 billion, down 12% (1%, adjusting for currency). Asia-Pacific revenues decreased 1% to $5.5 billion.

OEM revenues were $615 million, down 31% compared with the 2007 fourth quarter. Revenues from the company's growth markets organization decreased 7% (up 6%, adjusting for currency) and represented 18% of geographic revenues.

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