Big Blue reports boffo numbers
Filed under: Company News, Technology, Economy, Earnings
Software and IT services giant IBM Corp. (IBM) reported its second quarter earnings after the market closed today and investors cheered. Big Blue busted out boffo numbers and management raised earnings projections for the coming year. Shares were up more than 3 percent in aftermarket trading. The numbers were impressive considering the sad state of the global economy. Net income of $3.1 billion constituted a 12 percent hop over the same period last year. Gross profit margin, a key indicator, was up 4.1 percent to 18.3 percent, a sign of continued strong management at the company. On the dark side, revenue was down by 13 percent to $23.2 billion over the same period last year. But that dark cloud was out shined by management's sunny outlook and revenue projection raise.
The IBM numbers lend more credence to the growing belief that the technology sector is in the midst of a robust recovery. However, IBM, which primarily supplies large and mid-sized corporations with software and services, seems to be faring better than Dell (DELL). The Round Rock (Texas) PC-maker, which competes with IBM in the services and enterprise computing markets, reported weak sales to corporations.
Currency conversion impacts muted the strength of IBM's numbers, however. In IBM's growth markets (primarily Asia and the developing world), the company showed a revenue decrease of 11 percent. Corrected for currency, those revenues actually increased one percent. Likewise, Dell's gross revenue decline of 12 percent, when corrected for currency distortions, was only 7 percent due to relative declines in local currencies versus the dollar.
Big Blue continued to make impressive inroads into the still growing Internet applications, remote applications delivery, and systems management market. Revenues from IBM's key information middleware products (WebSphere, Information Management, Tivoli, Lotus and Rational) rose by 5 percent, adjusting for currency, to $3 billion, as compared to the same period a year previous.
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Reader Comments (Page 1 of 1)
7-16-2009 @ 8:55PM
Chris said...
Is it really any surprise that IBM is posting these strongly positive earnings?
I'm sure that any company that periodically lays-off thousands of its employees at a time could fare just as well: When you have less people to pay, you (as a company) keep more of your profit. This in turn makes your company look more profitable. But, hey, as long as the shareholders are happy, right? No one seems to care what those who were laid off think.
The point is that IBM has gotten away from its roots, and no longer looks after its employees in a respectable manner. To them, people are expendable; the individual no longer has any personal value. It has become all about profit.
An American (which claims it is 'multinational') company should know better!
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7-16-2009 @ 9:54PM
Dean said...
Chris, I worked for IBM for 30 years, most of them either directly under the auspice of the Watson family or a Chairman handpicked by a Watson. Those were VERY good years .... like one big happy family. The company couldn't do enough for its employees. In 1989 however, it began to dawn on senior management that things were not so great anymore. Then began the incentives for employees to 'retire' early and began the stewardship of IBM by other than an IBM'er. Lou Gerstner took over, did some very un- IBM like things and in doing so returned the company to competitiveness and profitability. Gerstner's employment was completely alien to what long time employees were used to. Times change. There ain't no such thing as a free lunch . Not anymore, not anywhere. I don't like it. I don't like hearing about this happening at IBM (or anywhere else) I still have many friends who work there and are biding their time waiting for 25 years of service so they can bail if necessary. I hope your situation is favorable Chris.
7-16-2009 @ 9:13PM
elisa said...
heard IBM is continuing its outstretch into markets such as SmartGrid, and these endeavors must truly be reflected in Big Blue's projections. It's impressive how IBM anticipates full-year earnings to be $9.7 per share.
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7-16-2009 @ 9:23PM
Pat said...
IBM is showing a profit --- easy to do ---- let go of your workers --- out source the paying jobs over seas and that is how its done in business today ---- BUT did anyone recall the President say when he was running that there would be tax breaks for bring back off shore jobs and big tax increases if the jobs don't return ????? I guess big blue must have given some money for the reelection !! Think about it --- PCs being built in China and the software done in India (all good paying jobs here)
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7-16-2009 @ 9:31PM
Bill said...
This is to go on Chris' stupid comment. Chris you are an idiot and need to stop posting comments when you don't know what you're talking about. These numbers are pre-tax numbers and posting of net income which is a 12% increase from last year does not come strictly from laying employees off...IBM has around 125,000 employees....get with the program smartass...
You just further prove how stupid American's are becoming....
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7-20-2009 @ 11:15PM
jay said...
IBM poorly managed for years ... any company that replaces work force with cheap over seas labor will show bigger profits ... IBM USA employees need a UNION to protect their investment working in a POORLY MANAGED company.
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