IBM posted first-quarter financial results that blew past analyst estimates, providing the second indication in as many days that some IT outfits aren't getting dragged into a slumping US economy that some say already is in recession. The company also raised its earnings estimates for the remainder of 2008.
"We feel good about the rest of the year," CEO Samuel Palmisano said in the earnings release. On Tuesday, Intel also beat Wall Street expectations when it released results for its first quarter.
IBM said net income rose 26 per cent to $2.32bn, or $1.65 per share, beating the average analyst estimate by 20 cents. Sales rose 11 per cent to $24.5bn. Sales in the US, where IBM gets about one-third of its revenue, rose 6 per cent. Adjusting for a weakening US dollar, sales from Europe, Africa and the Middle East rose 4 per cent, and the Asia-Pacific region saw a 3 per cent boost.
Sales from software, which is IBM's more profitable business, were $4.85bn, up 14 per cent. Revenue from global business services rose 17.4 per cent to $4.9bn, and sales from global technology services grew 17 per cent to $9.68bn.
IBM shares rose 2.5 per cent to $123.44 in after-hours trading following the announcement. ®