Technology giant IBM last night issued a 2009 profit outlook which easily beat Wall Street expectations. The company's results for the fourth quarter of 2008 also beat forecasts.
The results were a rare bright spot for the technology industry, which has been hit by profit warnings and sweeping job cuts as companies and consumers reduce spending. IBM employs around 3,000 people in Ireland.
Although IBM's fourth-quarter revenue came in a little short of expectations, falling 6.4% from a year earlier, the company also managed to cut costs by 3% to 4%. A lower tax rate also helped.
Chief Executive Samuel Palmisano said IBM was 'ahead of pace' on a plan to boost earnings to $10 to $11 per share by 2010. That was more optimistic than its last assessment in October, when the firm said only it was on track toward meeting that goal.
IBM recorded a gross profit margin of 47.9%, up three percentage points from a year earlier. The company has moved into more profitable areas since 2000, dumping commodity hardware units which made personal computers, printers and PC hard drives. At the same time, it spent about $20 billion on acquisitions of software makers and IT services firms.
IBM predicted 2009 earnings of least $9.20 a share, against expectations of $8.77 from analysts.
It said net profits rose 12% to $4.43 billion, or $3.28 per share, in the fourth quarter from a year earlier. Revenue fell 6.4% to $27 billion, but turnover in its software segment climbed 3% to $6.4 billion.
