IBM posts 14% rise in net income in Q3
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Last Updated: Friday, October 16, 2009, 15:08
New York: Technology giant IBM has reported a 14 percent jump in net income at USD 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 USD 2.8 billion, IBM said in a statement.

Total revenues stood at USD 23.6 billion in the quarter under review, a decrease of seven percent from the same quarter last fiscal. However, sales increased by one percent 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 USD 8 billion.

From a geographic perspective, IBM saw the Americas' third-quarter revenues falling by 5 per cent to USD 9.9 billion. While, Asia-Pacific revenues were essentially flat (down 4 percent) at USD 5.2 billion.

Besides, revenues from Europe, the Middle East and Africa region were USD 7.8 billion, down by 12 percent.

IBM's balance sheet remains strong with USD 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 USD 1.7 billion to shareholders through USD 726 million in dividends and USD 930 million of share repurchases.

In the software segment, revenues declined by three per cent to USD 5.1 billion. However, revenues from IBM's key middle ware products, which include websphere, information management, Tivoli, Lotus and rational products, were USD 2.9 billion, a two percent increase over the year-ago period.

IBM witnessed a decrease of seven per cent to new services contract from the September quarter of 2008, totalling USD 11.8 billion including 13 contracts greater than USD 100 million.

For nine months ended September, technology major posted a net income of USD 8.6 billion against USD 7.9 billion in the year-ago period. Revenues for the period totalled USD 68.5 billion against USD 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 percent. Global Technology Services segment revenues dropped four percent to USD 9.4 billion.

Bureau Report

First Published: Friday, October 16, 2009, 15:08

Tag: IBMQ3 Profit
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