Record revenues at IBM

15 Jan 2004

IBM grew its fourth-quarter revenue by 9pc to US$25.9bn and declared profits of US$2.7bn for the same period, an increase of 42pc, the company revealed.

For the three-month period ended 31 December 2003, the computer maker saw growth across all geographical regions in which it operates and in most of its product lines. In the Americas, fourth-quarter revenues from continuing operations were US$10.6bn, up 4pc from the same period last year. Revenues from Europe, the Middle East and Africa (EMEA) were US$9.1bn, an increase of 17pc. Asia-Pacific revenues rose 13pc. However Original equipment manufacturing (OEM) revenues fell 14pc compared with 2002’s fourth quarter.

Summing up the results, Sam Palmisano, IBM chairman and chief executive officer, said: “This was a very good quarter for IBM and an encouraging end to a year in which we steadily gained momentum and posted record revenues.”

Revenues grew at double-digit rates in four of the six industry sectors in which IBM operates. The largest of these was Financial Services, which grew at 17pc year-on-year. Revenues from the company’s Global Services division, including maintenance, increased 8pc to US$11.4bn in Q4. IBM signed US$17.3bn in services contracts in the fourth quarter including three US$1bn-plus contracts and an additional 18 contracts in excess of US$100m each.

Hardware revenues rose 12pc to US$9.1bn from the same period in 2002. Total Systems Group revenues were US$4.9bn, up 18pc.

Personal Systems Group revenues increased 16pc to US$3.5bn primarily from higher revenues for personal computers, particularly mobile products; here, increased volumes “more than offset reductions in prices”, according to IBM.

Software revenues accounted for US$4.3bn, up 12pc. Revenues from IBM’s middleware products, which include WebSphere, DB2, Rational, Tivoli and Lotus products, grew by 14pc to US$3.4bn in the fourth quarter of 2003. Operating systems revenues increased 6pc.

“We enter 2004 with good momentum. The client buying environment is steadily improving. We are enthusiastic about our prospects for this year and beyond,” Palmisano concluded.

By Gordon Smith