Thank God for IBM
After market close Tuesday, IBM reported a fiscal fourth-quarter profit that rose 12 percent year over year and said it expects its earnings for 2009 to surpass current estimates. IBM believes it will earn at least $9.20 a share in 2009, while analysts have been betting on $8.75.
IBM (IBM) reported net income of $4.43 billion, or $3.28 a share, up from $3.95 billion, or $2.80 a share, a year earlier. Analysts polled by Thomson Reuters were looking for $3.03 on revenue of $28.15 billion.
In a statement–which included no mention of rumored layoffs–chief executive Samuel Palmisano said IBM “performed well in an extremely difficult economic environment.” And indeed it did, thanks in large part to its software business, whose revenues rose three percent during the quarter.
Clearly, the six or so acquisitions IBM used to bolster that business in 2008 were prudent and may well have protected the company from the downturn that hampered its other divisions. Said Palmisano, “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. With our strong financial position, solid recurring revenue and profit streams and global reach, we are confident about 2009 and, based on our 2008 performance, we are ahead of pace on our roadmap for $10 to $11 per share.”
And with that, IBM painted a grinning happy face on the current downturn. Question now is, will it survive the week….
