Services Growth Fuels IBM's Third Quarter Results
IBM, always a reliable bellwether for the overall health of the high-tech industry,
solid revenues and earnings
for the third quarter yesterday, which were
buoyed by the performance of its services unit.
While its overall earnings were up 6 percent, Big Blue's hardware sales fell
some 10 percent to $4.9 billion. Some of that decline can be attributed to the
recent sale of its printer division, but what was more notable were the numbers
turned in by its mainframe group, which were down a whopping 31 percent. Chip
sales, which were off by 15 percent, also disappointed some analysts,.
IBM's software group, perhaps the most profitable group in the company during
the past few years, grew by 7 percent to $4.7 billion, although it would've
been only 3 percent without shifts in the dollar.
But the best news came out of the company's mammoth services group, which reported
revenues growth at 14 percent to $13.7 billion. What was at least as impressive
was the 27 percent up-tick in pretax profits. Company officials reported that
IBM signed some $11.8 billion in services contracts in the third quarter, up
from $10.5 billion in last year's third quarter.
Overall revenues rose 7 percent to $24.1 billion, up from last's year's $22.6
billion, with earnings of $2.36 billion, up from last year's third quarter figure
of $2.22 billion.
Posted by Ed Scannell on October 18, 2007 at 11:57 AM