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IBM posts better than expected profits

updated 03:48 pm EDT, Thu July 19, 2012

Weak revenue, but outperforms expectations

In its quarterly financial statement today, IBM announced solid quarterly profits that outperformed Wall Street expectations, making for 29 consecutive quarters the company has met or exceeded investor predictions. IBM's report carried a note of caution, as its revenues underperformed versus investor expectations, due to lower hardware sales and troubles in some markets. Still, as The New York Times reports, the company maintained its streak of reliability, and shares in the company have risen four percent today on beliefs that its profitability streak will continue unabated.

IBM posted a gross operating profit margin of 48.2 percent, up 1.5 percent from the previous year. On $25.8 billion in total revenues, the company had a net income of $3.9 billion, compared with $3.7 billion for the same quarter in 2011. That makes for an income increase of six percent versus last year.

Software revenues for the company remained flat, and revenues from IBM's services division were down three percent. Systems and technology revenues were also down nine percent, while the business analytics segment posted revenues 13 percent higher for the first half of 2012. Revenues from IBM's cloud services division doubled their total from 2011.

Most of IBM's sales are now coming from its overseas operations, so the recent strengthening of the dollar has the effect of softening the impact of its successes. Still, the company's long-term business model -- which focuses on higher-margin businesses and faster-growing overseas markets while cutting costs -- appears to be working well, and the company has steadily maintained profitability in the face of the global economic downturn.



By Electronista Staff
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