IBM ups 2010 outlook; New mainframes spur hardware sales

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.

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