IBM earnings beat analyst expectations
Updated at 1:56 p.m. PST, with additional earnings information and after-hours trading performance.
IBM reported Tuesday a 12 percent increase in fourth-quarter earnings, coming in stronger than analysts' expectations.
Big Blue generated net income of $4.4 billion, or $3.28 a share, for the quarter, up 12 percent over the same period a year ago.
Wall Street had expected Big Blue to post earnings of $3.03 a share for the three-month period.
The technology bellwether also reported that it is not only on track to achieve its previously stated goal of generating an annual profit of $10 to $11 a share in 2010, but that it's ahead of the pace it set out to get there.
IBM shares were up nearly 4 percent, to $85.14, in after-hours trading Tuesday.
"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," Samuel Palmisano, IBM chief executive, said in a statement.
Revenue, meanwhile, reached $27 billion in the fourth quarter, down 6 percent over last year. But when accounting for currency changes, the revenue decline was 1 percent. Analysts had expected IBM to generate revenue of $28.3 billion for the quarter.
"A strong fourth quarter capped an outstanding year," Palmisano said. "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."
During the quarter, the Americas generated revenue of $11.5 billion, up 2 percent over last year when adjusting for currency changes, for example.
Big Blue's software revenue was up 9 percent, when adjusting for currency, to $6.4 billion, while revenue in global technology services was up 3 percent to $9.6 billion when adjusting for currency.
Its global business services was flat, when adjusting for currency, to $4.7 billion, while its outsourcing services contracts generated $17.2 billion in revenue in the quarter, up 2 percent when factoring in currency changes.
Dawn Kawamoto covers enterprise security and financial news relating to technology for CNET News. E-mail Dawn. 
This is a bit of a shocker, honestly I'm completely surprised... One hypothesis is that people realize the desktop options are a nice to have... the backend infrastructure MUST be in place.
Following this model, would mean that when MS comes out with their standings... Sever and Tools + Windows Server should be strong... while I think everyone is expecting Office and windows client will be super down!
Since IBM has always been traditionally in what I'll call the deep infrastructure... the mainframe, db2, ... and less in the sharepointy/web portal/.... It will be interesting to see if all of the peripherals take a pretty big hit as well, meaning predominantly SharePoint. At the end of hte day people didn't have web portals before and buisiness got done... it hasn't been since before computers that they haven't depended on the type of software where IBM plays the strongest.
Websphere Portal has been named the Global Enterprise Portal Leader by Gartner in their MQ, 7 years in a row and is way out in front in IDC's Global Market share, BTW the main competitor is BEA not Microsoft.
IBM Software leads the Enterprise Portal, Web Content Management, Social Software for Business and Secure Collaboration Markets when competing with MS and many, many others when not. Please read the market share reports and industry analysis rather than just Redmond's PR, the Software market is based on all market sectors not just Small and Medium Business.
BTW, How do you turn a great profit result from IBM and a poor performance from MS into a view that MS will do better than expected???
- by cave code January 22, 2009 5:53 AM PST
- PLEASE IBM!!! Buy Sun Microsystems!!! For the good of all humanity. If it falls into the hands of HP or (gasp Microsoft ) Java will never be the same.
- Like this Reply to this comment
-
(3 Comments)