Feeds

Servers carry IBM to solid Q1

A little currency love too

  • alert
  • submit to reddit

Boost IT visibility and business value

A solid performance from IBM's server unit helped carry the company to a decent first quarter.

IBM reported $22.2bn in total revenue for the quarter, which stands as an 11 per cent increase over the $20.1bn posted a year ago. Net income also increased to $1.6bn up from $1.4bn.

"IBM continued to out-perform the industry in our selected segments and gained share," said Sam Palmisano, CEO at IBM. "We continued our industry-leading work in services with more than $10bn in signings after a very strong fourth quarter of signings, and we grew our software and systems businesses, with significant progress in zSeries (mainframe) servers and WebSphere middleware. We delivered double-digit growth in emerging markets such as China, Eastern Europe, India and Brazil. Our balance sheet remains strong, with $8.5bn of cash on hand."

As has been the case of late, IBM's results were boosted favorable currency conditions. For example, the 11 per cent total revenue gain drops to 3 per cent in constant currency. IBM's hardware business was the only major group to post double-digit gains in constant currency.

The first quarter success of the hardware team should come as no surprise. IBM has been steadily gaining share against competitors in both the Intel/AMD and Unix markets.

In Q1, IBM's hardware revenue rose 16 per cent (10 per cent in constant currency) to $6.7bn. A 100 percent increase in mainframe "computing power" was a major driver for this business. Since last year's Q1, IBM has rolled out several new mainframe systems. Intel/AMD and Unix server revenues were up as well.

IBM's software business pumped out $3.5bn in sales - an 11 per cent year-over-year increase (3 per cent with currency adjustments). The PC division increased revenue 18 per cent to $2.8bn. On the down side, IBM's financing operations saw revenue drop 6 per cent to $662m.

IBM's oft talked about global services group managed to increase revenue 9 per cent to $11bn from $10.2bn last year.

While IBM said its growth was ahead of competitors, recent results do not really back up the claims. IBM's microelectronics business, for example, had a $154m loss in the quarter - much higher than the $11m loss in the year earlier period. Intel and AMD, by contrast, posted solid results.

In hardware, IBM faired only okay. Storage-heavy EMC posted much stronger overall growth, and Dell recently upped an already optimistic forecast.

IBM's only real whipping boy was Sun.

All in all, however, it's hard to compare more specialized companies against IBM. The best head-to-head mark will come when HP reports its results. ®

Related stories

IBM sells off low-end PowerPC chips
Offshore analysts speak with forked tongue
IBM buys disaster recovery biz

Best practices for enterprise data

More from The Register

next story
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Nintend-OH NO! Sorry, Mario – your profits are in another castle
Red-hatted mascot, red-colored logo, red-stained finance books
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
prev story

Whitepapers

7 Elements of Radically Simple OS Migration
Avoid the typical headaches of OS migration during your next project by learning about 7 elements of radically simple OS migration.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Solving today's distributed Big Data backup challenges
Enable IT efficiency and allow a firm to access and reuse corporate information for competitive advantage, ultimately changing business outcomes.
A new approach to endpoint data protection
What is the best way to ensure comprehensive visibility, management, and control of information on both company-owned and employee-owned devices?