IBM reported a 13 per cent slide in revenue as corporate spending fell, but cost cuts and a shift to more profitable businesses helped it trump earnings expectations, and the company raised its profit outlook for the full year.
IBM employs almost 4,000 staff in the Republic, making it one of the largest multinational employers in the State. It recently announced the expansion of its software labs in Dublin, Cork and Galway as part of a €25 million investment that will create 100 jobs.
The company said it now expects 2009 earnings of at least $9.70 per share, up from its previous outlook of $9.20.
Analysts said the higher outlook took the disappointment out of lower-than-expected second-quarter revenue, which fell to $23.3 billion from $26.8 billion a year earlier.
Analysts' average forecast had been for $23.5 billion, according to Reuters Estimates.
Net profit for the quarter rose to $3.1 billion from $2.8 billion in the year-ago quarter. Profit per share rose to $2.32 from $1.97, much higher than the average Wall Street forecast of $2.01 per share.
IBM has fared better than many other technology companies amid the economic downturn, helped by its growing focus on profitable software and services like outsourcing and technology support, rather than increasingly commoditized hardware.
Its gross profit margin rose to 45.5 per cent from 43.2 per cent a year earlier.
Chief executive Samuel Palmisano said the results underscored how the company's transformation was working.
“We are well ahead of pace for our 2010 roadmap of $10 to $11 per share,” he said in a statement.
The upbeat results added to the market's optimism following leading chipmaker Intel's stronger-than-expected earnings and outlook announcement this week.
IBM said it was benefitting from a change in strategy introduced in recent years as it moved towards a mix of higher-value software and services, while continuing to invest in its core business.
Reuters