IBM targets 2008 profit above expectations
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IBM  on Thursday forecast  2008 earnings well ahead of Wall Street expectations after  results showing a strong international performance, and its  shares rose 5 percent.
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Honeywell International Inc  on Thursday forecast 2008 profit growth of 16 percent to 21 percent, broadly above Wall Street estimates, with strength in its aerospace business and continued growth in emerging markets offsetting a slowing U.S. economy.
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IBM announced strong second-quarter results today, with good news for both its Americas and services businesses, which previously had underperformed.
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(InfoWorld) - IBM's chairman, CEO and president, Sam Palmisano, declared the vendor's second-quarter fiscal 2007 financial results the company's best growth performance in six years. This quarter's strong revenue growth -- "our best since 2001" -- shows IBM's global reach and the value customers are placing on the company's expanded software line and services, he said in a statement. Palmisano added that IBM is well on its way to achieving its goals for growth through 2010, making "solid progress" on its road map for the next three years. For the second quarter of fiscal 2007, which ended June 30, IBM reported a rise in net income of 11.8 percent over the year-ago quarter to $2.3 billion on revenue up 9 percent to $23.8 billion. EPS (earnings per share) grew 19 percent to $1.55, compared to the same quarter a year ago. The results included a pre-tax gain of $81 million related to IBM's sale of its printing systems division to Ricoh. Excluding that gain, income from continuing operations was $2.2 billion, up 8 percent on the second quarter of fiscal 2006. A consensus estimate of Thomson Financial analysts, which didn't include the pre-tax gain, was that IBM would report revenue of $23.1 billion on an EPS of $1.47. IBM's revenue from the Americas rebounded during the quarter to grow 6 percent on the year-ago quarter to $10.1 billion, while revenue from Europe, the Middle East, and Africa rose 13 percent to $8.2 billion and Asia-Pacific revenue was up 10 percent to $4.6 billion. Back in April, when discussing IBM's first-quarter results, Mark Loughridge, the company's CFO, identified a slowdown in the vendor's U.S. enterprise business, particularly in the industrial, financial services, and communications sectors, in March. He didn't provide a satisfactory answer as to why the slowdown had occurred but dismissed it as more of a blip than an indicator that something serious was wrong. Loughridge predicted modest growth for IBM's overall Americas business in the second quarter. There was also good news in the most recent quarterly report about IBM's services business, which, though large, has been a stumbling block in terms of growth. Total global services revenue rose 10 percent in the second quarter, led by growth in Asia-Pacific. IBM cut costs by making two rounds ofÂ job cutsÂ in its services divisionÂ in May, affecting more than 2,800 employees. IBM's systems and technology division saw revenue growth of just 2 percent to reach $5.1 billion, while the vendor's software business increased revenue by 13 percent to $4.8 billion. Significant events for IBM occurring in the second quarter included Amazon.com paying the vendor an undisclosed amount of money toÂ settle all outstanding patent lawsuits between the two companies. They also signed a long-term patent cross-licensing agreement to end a dispute that began in 2002 and made it to the courts last year when IBM sued Amazon.com and then the online retailer countersued with both parties alleging that the other had infringed on its patents. IBM also began shipping its new dual-core Power6 microprocessor on a new midrange server, the System p 570, and started talking up blade and mainframe offerings for SMBs. The vendor also put the next major release of its DB2 database, currently known as Viper 2 and due to ship before the end of the year, into open beta testing On the acquisitions front, IBM made two purchases in June to add functionality to its Rational development tools family. The vendor firstÂ acquired Web application security vendor WatchfireÂ for an undisclosed sum and then announced plansÂ to buy Swedish software development tools company TelelogicÂ for $745 million. In other IBM news, the company announced Wednesday the retirement of Paul Horn, the current head of IBM Research. Taking over his role is John Kelly, previously senior vice president, technology and intellectual property at IBM.
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IBM  on Thursday forecast  2008 earnings ahead of Wall Street expectations, sending its  shares up 5 percent.
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Investor's Business Daily - IBM exceeded analysts&#39; second-quarter earnings forecasts Wednesday on strong software sales, driving up its stock price 3% in after-hours trading.
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International Business Machines Corp.  on Tuesday posted a quarterly net profit that beat Wall Street's recently raised profit target as solid year-end product sales were buoyed by a weaker U.S. dollar.
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IBM provided more details of its robust fourth-quarter and 2007 financial performance on Thursday following an early preview of the figures on Monday.IBM expects its overall growth to continue significantly in 2008 with earnings per share rising to between $8.20 and $8.30 this year, and between $10 and $11 by 2010. That would compare to $7.18 per share reported for 2007.&quot;I realize this is a challenging environment with economic uncertainty, but I think there are still opportunities for growth,&quot; Mark Loughridge, IBM&#39;s CFO, said during a conference call.IBM is in good position even in the event of a downturn, Loughridge argued, because of its global reach, its status as a &quot;proven infrastructure provider,&quot; and the capital it has for investments. The company ended 2007 with $16.1 billion in cash on hand.IBM&#39;s pending acquisitions of Telelogic and Cognos will add further to the bottom line in 2008, he said. &quot;We expect to provide synergies not only in software but [also in] services, servers, and storage,&quot; Loughridge said of the Cognos deal.IBM&#39;s fourth-quarter growth was especially strong in emerging markets and in its services and software groups, Loughridge said, though the company&#39;s System z mainframe business didn&#39;t perform as well.As reported on Monday, IBM&#39;s fourth-quarter revenue, aided by exchange rates and sales outside the U.S., stood at $28.9 billion, an increase of 10 percent over the same period in 2006. The figure beat the forecast of $27.82 billion from analysts polled by Thomson First Call, and was aided by the ongoing weakness in the dollar.Earnings per share for the quarter was $2.80, topping the analysts&#39; forecast of $2.60 per share. The results represent a 24 percent increase over the same period in 2006, when IBM earned $2.26 per share.IBM&#39;s services and software divisions showed particular strength in the quarter. Revenue from Global Technology Services grew 16 percent to $10 billion, reflecting strength around the globe and in various industries, IBM said. Global Business Services rose 17 percent to $4.9 billion, the company said.IBM&#39;s Software Group had fourth-quarter revenue of $6.3 billion, an increase of 12 percent compared to 2006. WebSphere revenue climbed by 23 percent; Information Management sales, 11 percent; Tivoli software, 19 percent; Lotus, 7 percent; and Rational, 22 percent, compared with the same quarter in 2006.Revenue from the Systems and Technology segment totaled $6.8 billion for the quarter, down 4 percent. System p UNIX server products grew by 9 percent from a year earlier, and System x server revenue increased 6 percent. But System z revenue fell by 15 percent.The drop in System z sales will be mitigated by the upcoming launch in February of IBM&#39;s next-generation mainframe, according to Loughridge. &quot;We expect the first quarter to be a period of product transition, with growth coming in the second quarter.&quot;The Americas generated $11.7 billion in revenue, up 5 percent over 2006. Revenue from Europe/Middle East/Africa was $10.8 billion, up 16 percent. Asia-Pacific revenue increased 15 percent to $5.5 billion. OEM revenues were $894 million, a drop of 13 percent compared to the same period in 2006.In some developing countries, including Malaysia and Ecuador, IBM is seeing &quot;insatiable demand&quot; due to strong economies powered by a growing middle class, Loughridge said.&quot;To me, this is a virtual gold rush in these rapidly emerging economies,&quot; he said. &quot;In the past, IBM built much of the infrastructure for the developed world. We see a new area of growth in these emerging markets.&quot;For the full year, total 2007 revenue was $98.8 billion, an 8 percent increase from 2006. The overall earnings for 2007, at $7.18 per share, marked an increase of 18 percent over 2006, IBM said. Net income for the year stood at $10.4 billion, up from $9.5 billion in 2006.IBM&#39;s stock was up $5.60 in after-hours trading to $106.50.
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IBM Corp. expects about $1 billion in revenue from India, as the company&#39;s hardware and services business in the local market soars.
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IBM reported a better-than-expected 24  percent rise in preliminary quarterly earnings on Monday on  strong sales in overseas markets, driving its shares up 6  percent and spurring a broader tech rally.
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Computer giant IBM said its fourth-quarter profit rose 12.2 percent from a year ago to 2.7 billion dollars, topping most Wall Street forecasts.
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IBM  reported a better-than-expected 24 percent rise in preliminary quarterly earnings on Monday on strong sales in overseas markets, driving its shares up 6 percent and spurring a broader tech rally.
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Electronic Data Systems Corp. , the world's second-largest technology services provider, on Monday posted a higher-than-expected quarterly profit thanks to cost cutting, but revenue fell and it forecast 2005 earnings would fall short of Wall Street estimates.
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International Business Machines Corp. on Thursday told Wall Street to raise its 2008 estimates, further boosting a stock that was already buoyed by strong fourth-quarter earnings.
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The company said quarterly profit would be higher than analystsâ estimates and it raised its full-year outlook as exchange rates and price and volume increases offset high commodity costs.
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Computer Associates International Ltd. , the software maker under government watch after an accounting scandal, on Wednesday posted better-than-expected quarterly results and said full-year earnings will exceed Wall Street estimates, helped by cost-cutting.
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IBM , the world's largest technology services company, on Wednesday posted a higher quarterly profit as revenue rose 9 percent, helped by software-company acquisitions and growth in computer services.