IBM performs as expected; shares up
Makes a change to see an IT company doing well
IBM has released its Q1 results and met expectations - not usually a cause for excitement, but considering the recent glut of profit warnings for IT companies, the news has seen its share price jump by up to 14 per cent.
The IT giant announced a 9 per cent increase in revenue to $21 billion. Net income was up 15 per cent on Q1 last year. The company put thanks for the increase on its services arm and microelectronics business.
IBM's CFO spoke a little about how it expects revenues to drop in line with the US economy slowdown, but it was hard to wipe the grin off his face.
What about the company's strategy? Well, the move away from big servers etc toward services (in the hope of sparking ancillary purchases) seems to be working. According to analysts, Sun and HP are now looking to do the same thing soon.
Lou Gerstner said: "The desktop segment is hurting - and it is not just a cyclical issue. This is a mature business, and it no longer drives the economics of the IT industry. Related to this, our hard disk drive and display businesses, which sell to the PC segment, were also weak." ®