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| IBM posts 14% rise in net income in Q3 |
| Press Trust of India / New York Oct 16, 2009, 15:37 IST |
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Technology giant IBM has reported a 14 per cent jump in net income at $3.2 billion for the third quarter of 2009 despite a slump in the sales.
In the year-ago period, the company had a net income of $2.8 billion, IBM said in a statement.
Total revenues stood at $23.6 billion in the quarter under review, a decrease of 7 per cent from the same quarter last fiscal. However, sales increased by 1 per cent over the previous quarter.
"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," IBM Chairman and Chief Executive Officer Samuel J Palmisano said, adding "we also saw improved revenue trends in our business and share gains in software and hardware."
In its outlook, IBM said it expects full-year 2009 pre-tax income for both its software and services segments to grow at double-digit rates and reach about $8 billion.
From a geographic perspective, IBM saw the Americas' third-quarter revenues falling by 5 per cent to $9.9 billion. While, Asia-Pacific revenues were essentially flat (down 4 per cent) at $5.2 billion.
Besides, revenues from Europe, the Middle East and Africa region were $7.8 billion, down by 12 per cent.
IBM's balance sheet remains strong with $11.5 billion of cash at the end of the quarter and the company is well positioned to take advantage of opportunities.
The company returned $1.7 billion to shareholders through $726 million in dividends and $930 million of share repurchases.
In the software segment, revenues declined by 3 per cent to $5.1 billion. However, revenues from IBM's key middle ware products, which include websphere, information management, Tivoli, Lotus and rational products, were $2.9 billion, a 2 per cent increase over the year-ago period.
IBM witnessed a decrease of 7 per cent to new services contract from the September quarter of 2008, totalling $11.8 billion including 13 contracts greater than $100 million.
For nine months ended September, technology major posted a net income of $8.6 billion against $7.9 billion in the year-ago period. Revenues for the period totalled $68.5 billion against $76.6 billion for the year ago period.
The company's Global Services unit revenues decreased 7 per cent and pre-tax income increased 11 per cent. Global Technology Services segment revenues dropped 4 per cent to $9.4 billion.
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