Big Blue posts small profit

19 Oct 2004

Technology giant IBM has posted a 1pc profit on revenues of US$1.8bn during the third quarter. Although earnings beat analysts’ expectations, the results were offset by a one-time US$320m charge the partial settlement of legal claims against IBM’s pension plan.

Without the one-time charge, IBM’s third-quarter income from continuing operations would have been US$2bn, an increase of 12pc. Revenues from continuing operations for the third quarter were US$23.4bn, up 9pc compared with the third quarter of 2003 revenues of US$21.5bn and up 1pc sequentially from US$23.2bn in the second quarter of this year.

Sam Palmisano, IBM chairman and chief executive officer, said: “In what is normally a challenging quarter for the technology industry, IBM delivered one of our strongest third quarters in revenue and earnings growth in recent years. IBM has been gaining momentum throughout the year and the strength of our integrated business model gives us confidence as we look toward 2005.

“We continue to see robust growth in key initiatives. Business Performance Transformation Services revenue grew more than 45pc year to date. We saw more than 30pc combined growth in the emerging markets of Brazil, China, India and Russia. And we’re seeing more clients move toward becoming on demand businesses, which is driving demand across our portfolio.”

Third-quarter revenue growth of 9pc (5pc, adjusting for currency) was driven by growth across all geographies. Revenues from EMEA were US$7.3bn, an increase of 8pc.

By John Kennedy