IBM profits up 16.6pc

16 Jul 2004

Computer giant IBM reported second quarter profits of US$2bn, up 16.6pc on profits generated during the same quarter last year. The profit amounted to US$1.16 per share.

Revenues from operation during the second quarter amounted to US$23.2bn, up 7pc on the second quarter of 2003.

The company said that revenue growth was driven by growth across all geographies, with particularly strong growth from the financial services sector, the industrial sector and the SME sector.

Global services revenues were up 7pc to US$11.3bn, revenues from hardware increased 12pc to US$7.4bn and revenue from software was flat at US$3.5bn. Global financing revenues declined 3pc.

Samuel J. Palmisano, IBM chairman and chief executive officer, said: “The IBM team delivered another fine quarter, which demonstrated the power of our business model and the advantages of our continued focus on serving enterprises and institutions around the world.

“We’re seeing more and more clients move toward becoming on demand businesses. This is increasing demand for our portfolio of services and computing infrastructure products. It was another strong quarter for large-scale systems, led by zSeries enterprise servers. IBM Global Services signed more than US$10bn in new business, and we are off to a strong start in the emerging Business Process Transformation Services opportunity.

“We saw first-half growth of roughly 40pc over last year, and we continue to invest heavily in this growth segment. IBM also grew significantly in emerging geographic markets in the first half, with 35pc combined growth in China, Russia, India and Brazil. Our balance sheet is strong, with US$8.2bn of cash available, and we continue to post an excellent return on invested capital.

“At a time of great change and opportunity in the IT industry, we remain focused on strengthening and broadening our client relationships through innovation and by delivering business solutions only IBM can provide. We continue to improve the operational effectiveness of the company. We are confident about our prospects going forward,” Palmisano said.

By John Kennedy