IBM grows profits, raises outlook

17-04-2008

by The Register

IBM posted first-quarter financial results that blew past analyst estimates, providing the second indication in as many days that some IT outfits aren't getting dragged into a slumping US economy that some say already is in recession.

The company also raised its earnings estimates for the remainder of 2008.

"We feel good about the rest of the year," CEO Samuel Palmisano said in the earnings release. On Tuesday, Intel also beat Wall Street expectations when it released results for its first quarter.

IBM said net income rose 26 percent to USD2.32 billion, or USD1.65 per share, beating the average analyst estimate by USD0.20. Sales rose 11 percent to USD24.5 billion. Sales in the US, where IBM gets about one-third of its revenue, rose 6 percent. Adjusting for a weakening US dollar, sales from Europe, Africa and the Middle East rose 4 percent, and the Asia-Pacific region saw a 3 percent boost.

Sales from software, which is IBM's more profitable business, were USD4.85 billion, up 14 percent. Revenue from global business services rose 17.4 percent to USD4.9 billion, and sales from global technology services grew 17 percent to USD9.68 billion.

IBM shares rose 2.5 percent to USD123.44 in after-hours trading following the announcement.

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