Technology giants strong despite economic gloom

IBM and Google have both released strong second quarter revenues despite tough economic times.

Google has announced second quarter revenue of $5.37bn or $3.93 per share and a profit of $1.25bn for the same period.

The results have disappointed analyst expectations but the firm’s results show an increase in profit of $32.271 or 28 per cent from the same period the previous year.
Investors remain confident in the search giant, a fact evident by Google’s price-to-earnings (P/E) calculated at 33.7, while competitor Yahoo’s P/E ratio is 29.9.

“Strong international growth as well as sustained traffic increases on Google’s web properties propelled us to another strong quarter, despite a more challenging economic environment,” said Google’s chief executive, Eric Schmidt.

IBM reported revenue of $26.8bn for its second quarter, and a profit of $2.7bn. Its profit is roughly in line with what it made during the same period in 2007, increasing by 4.5 per cent.

Despite a revenue growth of only 5 per cent in the US, IBM grew 20 per cent in Europe, the Middle East and Africa, and 16 per cent in the Asia Pacific region.

“These results demonstrate that IBM has the ability to thrive in both emerging and established markets,” said Samuel Palmisano, IBM chairman, president and chief executive officer.

However, although Google and IBM appear to be doing well, chip maker Advanced Micro Devices (AMD) reported a $1.19bn loss during its second quarter.

AMD chief executive Hector Ruiz stepped down from his position following the announcement and the company revealed it will cut its consumer electronics division. AMD president and chief operating office Dirk Meyer will take over Ruiz’s responsibilities.