IBM's Services, Software to Thank for Profit Pop
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IBM, the world's biggest technology services company, posted a higher quarterly profit on Thursday as an increase in services and software revenue offset a decline in computer hardware sales.
The results confirmed preliminary figures released last week, when IBM (NYSE: IBM) posted a higher-than-expected third-quarter profit and reaffirmed its full-year outlook despite weaker quarterly revenue due to a stronger dollar.
IBM's steady performance has helped its stock hold up better than many tech shares during the global financial crisis. IBM shares have lost 18 percent so far this year, versus a 37 percent drop in the NASDAQ Composite Index.
Revenue from IBM's services business, its largest segment, climbed 8 percent to $14.8 billion. Revenue at its software division, its most profitable, rose 12 percent to $5.2 billion. Hardware sales fell 10 percent to $4.4 billion.
The Armonk, New York company said that third-quarter net income rose to $2.8 billion, or $2.05 per share, from $2.4 billion, or $1.68 per share, a year earlier. Revenue rose 5 percent to $25.3 billion.