By Jennifer Guevin, 9 October 2008 08:38
NEWS
While much of the tech sector is bemoaning a sluggish economy, Big Blue sees blue skies ahead. IBM on Wednesday announced positive preliminary profits for the third quarter of 2008.
IBM said profits per share were at $2.05 for the quarter, up 22 per cent from the same period last year. Net income rose 20 per cent to reach $2.8bn, while revenue rose five per cent to $25.3bn.
Chuck Jones, a technology analyst for Atlantic Trust Private Wealth Management, told Reuters: "It is very nice to see some positive news, not just for IBM but for - to a degree - the tech space overall, given the downdraft we have seen in recent weeks."
IBM is also optimistic about results for the rest of the year. In its statement, the company reaffirmed its outlook for the full year, saying it continues to expect profits per share of at least $8.75 for the fiscal year 2008, showing growth of 22 per cent over 2007.
Big Blue said its year-to-date free cash flow was approximately $6.4bn at the end of the quarter and its cash balance was $9.8bn.
"For companies to be reaffirming their outlook through the end of the year is huge," Mike Holland, chairman of investment company Holland & Co, told Reuters.
"In this environment, the combination of meeting current expectations but also reaffirming their outlook is an incredible performance," he said.
IBM says it will offer more details in its regularly scheduled webcast, which is planned for 16 October.
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