IBM ups 2010 outlook; New mainframes spur hardware sales

Summary:IBM upped its 2010 earnings outlook after delivering a strong third quarter. The company showed strength in businesses ranging from mainframes to middleware to analytics.

IBM upped its 2010 earnings outlook after delivering a strong third quarter. The company showed strength in businesses ranging from services to mainframes to analytics.

The company reported net income of $3.6 billion, or $2.82 a share, on revenue of $24.3 billion, up 3 percent from a year ago (statement). Wall Street was expecting earnings of $2.75 a share on revenue of $24.13 billion.

For 2010, IBM projected earnings "of at least $11.40. That's a dime better than current Wall Street estimates.

In a statement, IBM CEO Samuel Palmisano said "we grew revenue in our hardware, software and services businesses, expanded margins and again increased earnings per share at double digits."

By the numbers:

  • Americas third quarter revenue was $10.2 billion, up 3 percent from a year ago. Revenue from Europe, Middle East and Africa was $7.4 billion, down 6 percent. Asia-Pacific revenue was up 14 percent to $5.9 billion.
  • Revenue in BRIC (Brazil, Russia, India and China) was up 29 percent in the third quarter.
  • Services revenue was up 2 percent overall. Global technology services revenue was $9.5 billion, up 1 percent from a year ago. Third quarter global business services revenue was up 5 percent to $4.6 billion. Services backlog was $134 billion as of Sept. 30.
  • Software revenue was $5.2 billion, up 1 percent from a year ago. Revenue from middleware was up 7 percent from a year ago.

  • Hardware revenue was $4.3 billion, up 10 percent from the third quarter a year ago. Revenue was propelled by IBM's new System z mainframes.

  • IBM had $11.1 billion in cash on hand.

Topics: Banking, Enterprise Software, Hardware, IBM

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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