IBM Surpasses Expectations -- Profit up 12%

Revenue grew by 29% over a year ago in Brazil, China, India and Russia.

IBM said on Oct. 18 that its third-quarter net profit rose 12% over a year ago to $3.6 billion while revenue increased 3% to $24.3 billion, better than the $24.1 billion forecast by analysts.

"We grew revenue in our hardware, software and services businesses, expanded margins and again increased earnings per share at double digits," IBM CEO Samuel Palmisano said.

"We achieved excellent performance in our growth markets unit, reflecting sustained investments through the downturn and the continued strength of the infrastructure build-out in these countries," he said.

"Looking ahead, we are uniquely positioned in the enterprise, investing in high value segments like business analytics, advanced systems and smarter planet solutions," Palmisano said.

IBM said revenue fell 6% in Africa, Europe and the Middle East during the quarter and increased three percent in North and South America.

Asia-Pacific revenue was up 14% while revenue grew by 29% over a year ago in Brazil, China, India and Russia.

CFO Mark Loughridge said IBM ended the quarter with cash on hand of more than $11 billion and plans to "use our strong cash position to invest in future growth." "I do think we'll see an increase in our software business to cap a strong year," he said.

Profit-taking sent IBM shares down 3.84% to $137.35 in after-hours electronic trading after they hit a record $143.03 during the day's trading on Wall Street.

Copyright Agence France-Presse, 2010

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