Feeds

IBM ignores foundering economy with top notch Q4

2008 looking okay too

Providing a secure and efficient Helpdesk

IBM did its best to calm fears of an imploding economy by posting strong fourth quarter results and issuing an optimistic take on the months to come.

The computing giant enjoyed a 10 per cent (4 per cent in constant currency) gain in revenue to $28.9bn. IBM also saw income rise 14 per cent year-on-year to $4bn. Most of IBM's major businesses contributed to the gains, including a much stronger performance out of the services units. In addition, sales in "emerging economies" stood out, according to IBM CFO Mark Loughridge, speaking during a conference call.

"This turned out to be a great quarter," Loughridge said. "In fact, it's the strongest revenue and profit performance in almost a decade."

The IBM results arrive during an extended US financial markets slide. Even nervous investors, however, were pleased enough with IBM's figures to send shares higher more than three per cent in after-hours trading, at the time of this report. (It should be noted that IBM reported preliminary figures for the quarter earlier in the week.)

Turning to individual businesses, IBM's Global Technology Services unit posted a 16 per cent year-over-year rise in revenue to $10bn. Global Business Services rose as well by 17 per cent to $5bn.

"This is the best (services) performance in years," Loughridge said.

IBM's Systems and Technology business, which includes server and storage hardware, dropped off by four per cent to $6.8bn. Unix server and storage sales helped during the period, while mainframe sales came in below hopes, falling 15 per cent. Microelectronics sales also failed to impress.

Loughridge believes that mainframe sales will improve in the next quarter when IBM unveils new hardware. The CFO revealed that the fresh mainframes will be announced and made available in late Feb.

In addition, Loughridge said that new low-end Power6-based servers will arrive by the end of the quarter along with new Unix virtualization software.

Software sales rose 12 per cent to $6.3bn, driven by middleware gains.

IBM's Global Financing group also pumped revenue by eight per cent to $668m.

For the full year, IBM's revenue rose eight per cent to $98.8bn. Meanwhile, income rose 11 per cent to $10.4bn.

When asked about the rather troubling global economic conditions, Loughridge held onto his optimism. IBM expects to see 2008 gains from mainframes, Unix systems, software and services.

In addition, the company sees the current housing and credit crisis as quite different from the dotcom blowout.

"I think the risk and issues you might see will be different from the last downturn," Loughridge said. "The last downturn was really characterized by overcapacity. I don't see that being the issue as we go into 2008."

IBM expects earnings per share growth to hit at least 15 per cent during 2008. ®

Beginner's guide to SSL certificates

More from The Register

next story
Scrapping the Human Rights Act: What about privacy and freedom of expression?
Justice minister's attack to destroy ability to challenge state
WHY did Sunday Mirror stoop to slurping selfies for smut sting?
Tabloid splashes, MP resigns - but there's a BIG copyright issue here
DVLA website GOES TITSUP on day paper car tax discs retire
Welcome to GOV.UK - digital by de ... FAULT
Hey Brit taxpayers. You just spent £4m on Central London ‘innovation playground’
Catapult me a Mojito, I feel an Digital Innovation coming on
Google hits back at 'Dear Rupert' over search dominance claims
Choc Factory sniffs: 'We're not pirate-lovers - also, you publish The Sun'
EU to accuse Ireland of giving Apple an overly peachy tax deal – report
Probe expected to say single-digit rate was unlawful
Inequality increasing? BOLLOCKS! You heard me: 'Screw the 1%'
There's morality and then there's economics ...
While you queued for an iPhone 6, Apple's Cook sold shares worth $35m
Right before the stock took a 3.8% dive amid bent and broken mobe drama
EU probes Google’s Android omerta again: Talk now, or else
Spill those Android secrets, or we’ll fine you
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.