IBM Profit Up Despite Fall in Revenue

Oct. 16, 2009
Company is optimistic about outlook for rest of year

IBM reported a higher quarterly net profit on Oct. 15. It said net profit rose 14% to $13.2 billion. Revenue fell 7% in the third quarter to $23.6 billion compared with the corresponding period a year ago but was one percent higher than the previous quarter.

The company raised its forecast for full-year earnings per share to "at least $9.85 from at least $9.70" on an improved outlook for both software and hardware.

"Our long-term strategic shift to higher-value businesses again enabled us to deliver outstanding margin, earnings and cash flow growth in the third quarter," said IBM chairman, CEO Samuel Palmisano. "We also saw improved revenue trends in our business and share gains in software and hardware."

"We are optimistic about 2009 as we again raise our full-year expectations and we remain well ahead of pace for our 2010 roadmap of $10 to $11 per share," Palmisano said.

The company said it signed service contracts worth $11.8 billion in the quarter, including 13 deals greater than $100 million, a decrease of 7%.

IBM said third-quarter revenue for the Americas fell 5% to $9.9 billion while revenue for Europe, the Middle East and Africa was down 12% to $7.8 billion. Asia-Pacific revenue was flat at $5.2 billion.

Global Technology Services segment revenue decreased 4% to $9.4 billion while Global Business Services segment revenue declined 11% to $4.3 billion.

IBM said software revenue declined 3% to $5.1 billion while systems and technology segment revenue dropped 12% to $3.9 billion.

Copyright Agence France-Presse, 2009

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