IBM revenue down

October 16, 2009

, NEW YORK, Oct 16 – US computer giant IBM reported a higher quarterly net profit on Thursday despite falling sales and delivered a more optimistic outlook for the full year.

IBM, which has weathered the global economic slowdown better than most major US corporations, said net profit rose 14 percent to 13.2 billion dollars, or 2.40 dollars per share, better than the 2.38 dollars predicted by analysts.

Revenue fell seven percent in the third quarter to 23.6 billion dollars compared with the corresponding period a year ago but was one percent higher than the previous quarter, IBM said in a statement.

The company raised its forecast for full-year earnings per share to "at least 9.85 dollars from at least 9.70 dollars" on an improved outlook for both software and hardware.

"Our long-term strategic shift to higher-value businesses again enabled us to deliver outstanding margin, earnings and cash flow growth in the third quarter," said IBM chairman, president and chief executive Samuel Palmisano.

"We also saw improved revenue trends in our business and share gains in software and hardware," he said.

"We are optimistic about 2009 as we again raise our full-year expectations and we remain well ahead of pace for our 2010 roadmap of 10 dollars to 11 dollars per share," Palmisano said.

The company said it signed service contracts worth 11.8 billion dollars in the quarter, including 13 deals greater than 100 million dollars, a decrease of seven percent.

IBM said third-quarter revenue for the Americas fell five percent to 9.9 billion dollars while revenue for Europe, the Middle East and Africa was down 12 percent to 7.8 billion dillars.

Asia-Pacific revenue was flat at 5.2 billion dollars.

Global Technology Services segment revenue decreased four percent to 9.4 billion dollars while Global Business Services segment revenue declined 11 percent to 4.3 billion dollars.

IBM said software revenue declined three percent to 5.1 billion dollars while systems and technology segment revenue dropped 12 percent to 3.9 billion dollars.

IBM said it ended the third quarter with 11.5 billion dollars of cash on hand.

Shares of IBM fell 3.41 percent in after-hours electronic trading to 123.61 dollars.

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