IBM said Tuesday that net profits rose 13 percent, although revenue was unimpressive in many areas and missed analysts' consensus estimate. Cost cuts and the sell-off of IBM's personal-computer business boosted profit margins, while positive trends in chips and mainframes helped the hardware division.
In the last three months of 2005, IBM earned $3.19 billion, or $1.99 per share, on revenue of $24.4 billion.
The results were pulled down 10 cents per share by a $267 million charge stemming from IBM's recent decision to freeze its pension plan for U.S. workers in 2008, and by 2 cents per share because of an accounting change.
Leaving those figures out, the $2.11 in earnings per share easily beat the $1.94 consensus of analysts surveyed by Thomson Financial. The revenue forecast was $25.5 billion.
In the same period of 2004, IBM registered a net profit of $2.83 billion, $1.67 per share, with revenue of $27.7 billion. However, subtracting the performance of IBM's personal-computer division, which has been sold to China's Lenovo Group Ltd., earnings would have been $2.77 billion, $1.64 per share, on $24.7 billion in revenue.
The results and outlook seemed to have a mixed message for investors, who bid IBM shares 15 cents lower in extended trading after the earnings report was released.
In all of 2005, IBM earned $7.93 billion, $4.87 per share, on revenue of $91.1 billion. In 2004, profits were $7.48 billion, $4.38 per share, on revenue of $96.3 billion.
Post Page Advertisement [Top]
Bottom Ad [Post Page]
