IBM beats the big economic blues

 

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By Stuart Turton

Posted on 21 Jan 2009 at 10:32

IBM has reported a 12% increase in fourth-quarter earnings, defying the economic gloom surrounding the industry.

The increase means IBM generated net income of $4.4 billion in its fourth quarter, despite worldwide sales falling by 6.4% as companies reduced orders for servers and services.

This saw revenue decrease 6% to $27 billion, though the company was eager to stress that taking into account currency fluctuations, the revenue decline was closer to 1%.

Among the big successes for Big Blue were its software division which raked in $6.4 billion, and its outsourcing services contracts which generated $17.2 billion, a 2% increase.

"A strong fourth quarter capped an outstanding year," says Samuel Palmisano, IBM chief executive. "In 2008, IBM performed well in an extremely difficult economic environment."

"Clearly our strategic transformation - migrating to the more profitable segments of the industry, investing in growth regions of the world, and driving productivity through global integration is continuing to pay dividends."

IBM also touted its cost cutting measures, and though it didn't announce the expected job cuts, it warned they were still part of its strategy going forward.