Feeds

Servers carry IBM to solid Q1

A little currency love too

  • alert
  • submit to reddit

High performance access to file storage

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

High performance access to file storage

More from The Register

next story
Sorry London, Europe's top tech city is Munich
New 'Atlas of ICT Activity' finds innovation isn't happening at Silicon Roundabout
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
HP ArcSight ESM solution helps Finansbank
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.