IBM earnings beat Wall Street expectations
Published: 21 Jan 2009 08:48 GMT
IBM on Tuesday reported a 12 percent increase in fourth-quarter earnings, coming in stronger than analysts' expectations.
The company generated net income of $4.4bn (£3.2bn), or $3.28 a share, for the quarter, up 12 percent over the same period a year ago.
Wall Street had expected IBM to post earnings of $3.03 a share for the three-month period.
The technology bellwether also reported that it is not only on track to achieve its previously stated goal of generating an annual profit of $10 to $11 a share in 2010, but that it's ahead of the pace it set out to get there.
IBM shares were up nearly four percent, to $85.14, in after-hours trading on Tuesday.
"With our strong financial position, solid recurring revenue and profit streams and global reach, we are confident about 2009 and, based on our 2008 performance, we are ahead of pace on our roadmap for $10 to $11 per share," Samuel Palmisano, IBM chief executive, said in a statement.
Revenue, meanwhile, reached $27bn in the fourth quarter, down six percent over last year. But when accounting for currency changes, the revenue decline was one percent. Analysts had expected IBM to generate revenue of $28.3bn for the quarter.
"A strong fourth quarter capped an outstanding year," Palmisano said. "In 2008, IBM performed well in an extremely difficult economic environment. Clearly our strategic transformation — migrating to the more profitable segments of the industry, investing in growth regions of the world, and driving productivity through global integration — is continuing to pay dividends."
During the quarter, the Americas generated revenue of $11.5bn, up two percent over last year when adjusting for currency changes, for example.
IBM's software revenue was up nine percent, when adjusting for currency, to $6.4bn, while revenue in global technology services was up three percent to $9.6bn when adjusting for currency.
Its global business services was flat, when adjusting for currency, to $4.7bn, while its outsourcing services contracts generated $17.2bn in revenue in the quarter, up two percent when factoring in currency changes.
Credit: IBM earnings beat analyst expectations from CNET News
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