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Hardware and software buoy IBM numbers in Q4

Microscope contributor

Good old fashioned hardware and software sales helped IBM offset more modest growth in services to finish 2010 on a high.

Big Blue pushed up turnover by 7% to $29bn (£18.1bn) in the fourth quarter ended 31 December, as profits grew 9% to $5.3bn (£3.3bn), in part due to the work on costs and the expense structure.

Mark Loughridge, IBM CFO described the revenue hike on a constant currency basis as the best "in almost a decade".

The Systems and Technology Group went up 22% to $6.3bn, with System z mainframe sales climbing 69%, System x up 18% and Power Systems and System Storage up 2% and 8% respectively.

Software was less buoyant, rising 7% to $7bn with Middleware up 13% and Operating Systems up 11%.

However services revenues climbed just 2%; Global Technology Services rose 1% to $10.2bn and Global Business Services increased 4% to $4.8bn.

Loughridge said the small gain in GTS sales came "primarily from existing backlog" but noted an increase in activity from its base of accounts for the first time in two years.

"We're seeing customers spend more in their base business as we exit the recession," he said.

IBM grew sales 9% in the Americas region to $12.2bn, 14% in Asia Pacific to $6.6bn but fell 2% in EMEA, though this was a sequential improvement.

Responding to analyst questions, Loughridge expected the momentum in its business product segments to continue in Q1.

"I expect that as we've studied it, it will be very similar in nature to our fourth quarter. In other words, really driven by the hardware and software transactional elements of our business," he said.

Related Topics: Desktop PCs, VIEW ALL TOPICS

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