IBM profit grows despite sales drop

The IT giant posted stronger-than-expected earnings and raised its 2009 outlook, but its revenues slipped from last year.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Hibah Yousuf, CNNMoney.com contributing writer

What do you think is the most important quality in a job?
  • Satisfying work
  • Good pay and benefits
  • Flexible hours
  • Growth opportunities

NEW YORK (CNNMoney.com) -- International Business Machines posted third-quarter results on Thursday that met analysts' forecasts, then raised its expectations for the rest of the year, citing improving sales trends during the quarter.

But investors were unimpressed: IBM shares dropped 5% in after-hours trading.

IBM (IBM, Fortune 500) said its net income for the quarter rose to $3.2 billion, up 14% compared to last year. Its per-share earnings were $2.40, beating the $2.38 per share consensus estimate of analysts polled by Thomson Reuters.

Sales for the Armonk, N.Y., diversified tech company fell 7% to $23.6 billion, slightly ahead of analysts' forecast of $23.4 billion.

Sales were down 5% in IBM's North American region and 6% in emerging markets, but dropped 12% in Europe, the Middle East and Africa.

Software was IBM's bright spot for the quarter. Software sales fell 3% -- the smallest decline for any of the company's business units -- but sales of IBM's middleware products rose 2%, to $2.9 billion.

Companies use middleware like IBM's WebSphere and Tivoli software to integrate disparate IT systems. Middleware accounted for more than half of IBM's software revenue during the quarter and is the fastest-growing part of IBM's software portfolio, IBM CFO Mark Loughridge said in a conference call with reporters following the financial results release.

IBM is optimistic about the rest of the year and expects full-year 2009 earnings of at least $9.85 per share, compared with its previous prediction of $9.70 per share.

The company also said is it "well ahead of pace" for its 2010 plans for earnings of $10 to $11 per share. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
A cheapskate's guide to tech From ebooks to phone service, here are some tips for living your digital life on the cheap. More
2015 Mustang's asphalt-peeling power goes modern The new Ford Mustang has been upgraded and updated to compete globally - but never fear, it's still a monster. More
15 top executives with $1 salaries Some CEOs and founders agree to salaries of just $1 a year. But once goodies like bonuses and stock options are added in, some of those executives end up taking home many millions of dollars a year. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.