IBM results deliver a boost for IT sector

IBM: record sales

IBM has delivered a boost to the IT sector by reporting record annual revenue and fourth-quarter profit up 12 per cent.

The technology giant achieved net income of $4.4bn (£3.2bn) in the last three months of its financial year, ahead of Wall Street expectations.

Quarterly revenue of $27bn (£19.6bn) was down six per cent though – but IBM attributed much of this to the strength of the dollar. Adjusting for currency fluctuations, sales would have been down just one per cent.

Annual revenue was $103.6bn (£75.2bn) and pre-tax profit hit $16.7bn (£12.1bn) - both a record for the company.

During the fourth quarter, software sales grew by three per cent, but technology services revenue fell four per cent and business service was down by five per cent.

However, the number of outsourcing deals signed was up 20 per cent worldwide.

Revenue from the Europe, Middle East and Africa region of $9.5bn was down 12 per cent.

"A strong fourth quarter capped an outstanding year," said IBM chief executive Samuel Palmisano.

"In 2008 IBM performed well in an extremely difficult economic environment. Clearly our strategic transformation - migrating to the more profitable segments of the industry, investing in growth regions of the world, and driving productivity through global integration - is continuing to pay dividends."

Many of IBM's rivals have found the deteriorating economic situation more difficult, with more than 35,000 job losses announced at major IT vendors over the past two months. Intel's most recent quarterly results showed a 90 per cent year-on-year drop in profit.