IBM Reports Significant Jump In Q4 Profitability

The technology sector has apparently resumed its path to recovery after months-long global economic meltdown, with a robust fourth quarter financial results from IBM being the latest pointer of the same.

Big Blue has breezed through the Wall Street’s predictions with a significant growth of 9 percent on year-over-year basis, posting quarterly earnings of $4.8 billion, or $3.59 per share, up from $3.27 per share registered for the same period a year ago.

The company has performed incredibly well for the final quarter, and posted profits that comfortably went past the Wall Street’s predictions of $3.47 per share.

However, revenues for the quarter were pegged at $27.2 billion, an increase by 1 percent for the revenues for the same period last year.

This revenue growth is more significant than it seems to be, as the world’s largest IT services provider has posted first year-over-year revenue growth since the third quarter of the year 2008.

The net income for the company stood at $13.4 billion, or $13.01 per share, a notable 13 percent increase over the previous year.

IBM registered the most substantial gains in the sales of middleware products, software applications used to help business systems to communicate with each other and serve as foundation for a slew of cutting edge IT architectures, including Software-as-a-Service (SaaS) and cloud computing.

Our Comments

Incidentally, the sales of the middleware products grew by a significant 13 percent as against the previous year, while the overall software sales rose by 2.4 percent. Sam Palmisano, CEO and chairman of IBM, evinced an optimistic outlook for the current year by saying, “We are confident about 2010 and our ability to achieve the high end of our long-term roadmap”.

Related Links

IBM Sees Growth In Software, Services

(Information Week)

Better Earnings Outlook for IBM

(Barron’s)

Related Links

IBM beats fourth-quarter estimates

(CNet)

IBM Reports 10 Percent Jump in Profit for Q4

(PC World)

IBM Offers Clues on Tech Recovery, Boosts Guidance

(ABC News)