Big Blue’s earnings slip

17 Jan 2003

Despite a 7pc rise in sales during its fourth quarter, IBM’s fourth quarter earnings have slipped to US$1.34 a share from US$1.46 last year.

IBM’s fourth quarter income from continuing operations was US$1.9bn compared with US$2.6bn in the fourth quarter of 2001.

However, revenues from continuing operations were US$23.7bn, up 7pc on last year’s revenues of US$22.1bn. The company attributed the growth in sales to significant sales of US$10.5bn at its Global Services division, mostly due to its acquisition of PricewatherhouseCoopers’ consultancy division last year.

IBM chairman and CEO Samuel Palmisano says: “In one of the most challenging years in business, we delivered a solid quarter and finished the year strong. We continue to gain share in our core businesses and managed our company very well in a tough environment. Our e-business on demand strategy is resonating as more customers look to IBM to improve productivity and drive competitive advantage.”

Software revenues at IBM were flat at US$3.8bn, hardware revenues increased 1pc to US$8.1bn, while revenues from IBM’s Global Services division grew 17pc to US$10.6bn. IBM is understood to have signed more than US$18bn in services contracts in the quarter compared with US$9bn in the 2002 third quarter.

In terms of the full results for 2002, IBM’s revenues totalled US$81.2bn, a 2pc decline compared with 2001 revenues of US$83.1bn.

By John Kennedy