Feeds

Fitter IBM drives profit higher in Q1

Free of PCs and workers

Boost IT visibility and business value

IBM's no frills agenda paid off in the first quarter as the giant posted a larger profit despite flat revenue.

In the past year, IBM cleaved almost 15,000 workers from its payroll. In addition, it sold off a low-margin PC business, having already disposed of a low-margin hard disk drive unit. This seems to be helping out the bottom line.

IBM, for example, reported a profit $1.7bn during the first quarter, which compares to $1.4bn in the same period last year. That's a more than tidy 21 per cent gain.

Meanwhile, total revenue dropped from $22.9b to $20.7bn, including results from the old PC unit. Without the PC baggage, IBM's revenue came in flat year-over-year.

"Our performance underscores the strength of our business model across a balanced portfolio of software, services and hardware, and demonstrates the benefits of the strategic actions we've taken in recent years to reposition the company," said CEO Sam Palmisano.

As ever, IBM's financial statement for the first quarter proved an adventure.

The company tried to put results in the best possible light by excluding both the PC unit effects and currency effects from core figures. That leaves sales up by low single-digitis in the Americas, EMEA and Asia-Pacific regions.

Looking at individual units, investors saw that IBM's Global Services group posted a 1 per cent decline in revenue to $11.6bn.

The server and storage group reported a 3 per cent revenue boost to $4.4bn on the back of strong processor, storage and x86 server sales. Unix server, iSeries and mainframe sales declined.

IBM's software business posted a 2 per cent revenue rise to $3.9bn with WebSphere and DB2 boosting the results.

All in all, IBM delivered a mixed bag, which has become a common theme for the company around earnings time. The beast can always point to one or two units as success stories while the rest of the units hover in the very low single digit growth or single digit loss areas.

IBM did not provide a second quarter forecast.

Investors pushed IBM shares slightly higher in after-hours trading to $84.35, at the time of this report.®

Build a business case: developing custom apps

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
Mozilla's 'Tiles' ads debut in new Firefox nightlies
You can try turning them off and on again
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Banking apps: Handy, can grab all your money... and RIDDLED with coding flaws
Yep, that one place you'd hoped you wouldn't find 'em
TROLL SLAYER Google grabs $1.3 MEEELLION in patent counter-suit
Chocolate Factory hits back at firm for suing customers
Primetime precrime? Minority Report TV series 'being developed'
I have to know. I have to find out what happened to my life
Ex-IBM CEO John Akers dies at 79
An era disrupted by the advent of the PC
prev story

Whitepapers

Gartner critical capabilities for enterprise endpoint backup
Learn why inSync received the highest overall rating from Druva and is the top choice for the mobile workforce.
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.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
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.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.