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IBM 4Q beats Street
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January 21, 1999: 4:42 p.m. ET
Increases in Big Blue's service and software revenue sparks strong profit
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NEW YORK (CNNfn) - IBM Corp. Thursday reported fourth-quarter profit ahead of Wall Street estimates as the company posted strong gains in its services and software businesses.
The Armonk, N.Y.-based technology giant logged a profit of $2.3 billion, or $2.47 a share, on revenue of $25.1 billion. Analysts expected IBM (IBM) to report a profit of $2.45 a share.
In the year-ago quarter, IBM posted earnings of $2.1 billion, or $2.11 a share, on $23.7 billion in revenue.
Louis Gertsner, IBM chairman and chief executive officer, said 60 percent of the company's gross profit came from global services and software.
The company's service revenue grew 20 percent to $7.1 billion from year-ago results, while software revenue was up 9 percent to $4.1 billion, fueled in part by record shipments of Lotus Notes collaboration software.
Gertsner noted, however, that the company faced continuing weakness in Latin American and Asian markets, as well as softness in memory chip prices.
IBM's gross profit margin slipped to 39 percent compared with 40.1 percent in last-year's fourth quarter.
For the full fiscal 1998 year, IBM reported a profit of $6.3 billion, or $6.57 a share, on $81.7 billion in revenue, compared with 1997 earnings of $6.1 billion, or $6.01 a share, on revenue of $78.5 billion.
The company finished the year with $5.8 billion in cash assets.
IBM shares climbed 2-1/2 to close at 197 in Thursday trade. 
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IBM
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