IBM restructuring boosts profit

IBM is running a leaner business

IBM has posted second-quarter net profit of $3.1bn (£1.9bn), 12 per cent up on the $2.8bn (£1.7bn) earned in the same period last year.

The better-than-expected results came despite a fall in sales across nearly all the firm's divisions, with total revenue down 13 per cent to $23.3bn (£14.3bn).

But widespread efficiency schemes and redistribution of the workforce allowed IBM to cut cost and retain profitability.

"As a result of our strategic transformation, we have a very strong business model that is delivering superior earnings, cash and client value,” said Samuel J Palmisano, IBM chairman, president and chief executive officer.

IBM said it now expects full-year 2009 earnings of at least $9.70 per share compared with its previous expectation of at least $9.20 per share.

"We have continued our strategic investments in Smarter Planet solutions, business analytics and next-generation datacentres," said Palmisano.

"As a result we are optimistic about how IBM is positioned to make the most of current growth opportunities as well as those that emerge as the economy recovers. We are well ahead of pace for our 2010 roadmap of $10 to $11 per share."