17 January 2002 IBM ended its 2002 financial year with an upturn in quarterly revenue after a 17% increase in fourth quarter sales at IBM Global Services.
The company’s revenues rose 7% to $23.68 billion (€22.24bn), compared to $22.14 (€20.79bn) posted in the same quarter a year earlier.
IBM CEO Sam Palmisano was particularly buoyed by a number of major new services contracts signed in the three months to the end of December by IBM Global Services – double the value of contracts signed in the third quarter.
The company’s July 2002 acquisition of the consulting arm of PricewaterhouseCoopers may have contributed to IBM’s revenue growth, but any benefit was offset by charges and pension contributions related to the acquisition totalling $614 million (€576.6m).
In addition, IBM recorded a loss from discontinued operations of $893 million (€838.5m), $625 million (€586.9m) of which was related to the sale of its hard disk drive business to Hitachi in December 2002.
As a result, net income in the fourth quarter was slashed by 56% from $2.33 billion (€2.19bn) to just over $1 billion (€939m). For the full 2002 fiscal year, revenue fell 2.3% to $81.19 billion (€76.25bn) and net income was down 54% to $3.58 billion (€3.36bn).
Over the year, hardware sales fell by a tenth and in other business segments, revenue either rose slightly or remained flat, compared with 2001. Software revenues increased just 1% to $13.1 billion (€12.3bn), while services revenues rose 4%, to $36.4 billion (€34.18bn).
IBM chief financial officer John Joyce, was bullish about IBM’s prospects for 2003. Joyce said that he expects “high single-digit” revenue growth for the year and net income to increase by about 10%.