IBM defies recession with 12% profit boost
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Computing giant breaks annual revenue and profit records amid global downturn
In a month of disastrous financial news from IT vendors, one company at least is bucking the trend. Today, IBM revealed that it broke its own records for both revenue and profit in the past year.
The company’s annual revenues were $103.6 billion, and net income for the year was $12.3 billion.
These record results came despite a 6% year-on-year revenue drop in the most recent, fourth quarter, down to $27 billion. This was attributed to unfavourable exchange rate fluctuations.
Profit for the quarter, meanwhile, shot up 12% compared with the same period of the previous year to $4.4 billion.
Most impressively, the number of outsourcing deals signed during the fourth quarter was up 20% year-on-year – a positive sign for the IT outsourcing industry.
CEO Sam Palmisano attributed the company’s success to its strategy of focusing on the most profitable areas of the business.
Lenovo, the Chinese PC manufacturer that acquired IBM’s PC-making division in 2005, recently revealed that it is preparing to report a loss-making financial quarter and plans to lay off 2,500 staff. Combined with today’s results, Lenovo’s current difficulties make IBM’s divestiture look like a prescient move.
