‘Unspectacular but solid’ was Wall Street’s reaction to IBM’s second quarter 2003 results released yesterday afternoon. Big Blue’s performance was suggestive of a tentative market recovery rather than the full-blown return to growth for which investors had hoped.
IBM’s net income from continuing operations was US$1.73bn compared with US$445m in the second quarter of 2002. When exceptional charges are excluded, second-quarter 2003 income from continuing operations grew 11pc. Revenue rose to US$21.63bn in the quarter, a 10pc rise on the US$19.65bn of a year ago.
Sam Palmisano, IBM chairman and chief executive officer, said: “Once again, IBM delivered a solid quarter despite the challenging economic environment.”
The outperforming parts of IBM’s business included IBM Global Services, where revenue rose 23pc to US$10.6bn, aided by the addition of the former PwC Consulting business; small and medium-sized business solutions that were strengthened by a new line of ‘Express’ technologies aimed squarely at the needs of this fast growing customer base; and IBM eServers, particularly the xSeries systems and Unix-based IBM pSeries.
Regionally, the strongest growth came from Europe, Middle East & Africa (EMEA), where revenue shot up 23pc to US$6.9bn.
Generally good performance in servers and storage devices were tarnished by disappointing PC sales, which helped drag down Personal Systems Group revenues by 3pc to US$2.7bn.
By Brian Skelly