IBM Posts Gains In Sales And RevenueIBM Posts Gains In Sales And Revenue

IBM, the world's biggest seller of computing equipment and services, reported Monday that earnings from continuing operations, which exclude results from the hard-drive business it exited last year, increased 8% year over year in the first quarter ended March 31, from 73 cents per share, or $1.3 billion in income, to 79 cents per share, or $1.4 billion in income. Revenue from continuing operations increased 11% over the same period--from $18 billion to $20.1 billion.

IBM expects to meet Wall Street profit and revenue estimates of $4.32 a share for 2003, CFO John Joyce said during a conference call after the results were announced.

In a statement, IBM chairman and CEO Sam Palmisano said a number of broad-reaching services deals that IBM struck lately with large enterprise customers--including Canada Life, BellSouth, and Visteon--helped boost the numbers. "IBM Global Services delivered another good quarter," said Palmisano, noting that the group booked $12 billion in contract signings during the period, its second-best performance ever during a first quarter.

The numbers indicate that that the slumping services market may be picking up. Earlier in the day, Accenture also said that it had recorded its second-best ever performance in a single quarter.

Overall, revenue from IBM's Global Services group jumped 24%, to $10.2 billion. The number includes business booked by PricewaterhouseCoopers Consulting after it was acquired by IBM last year.

IBM said revenue from software sales rose 8%, to $3.1 billion, compared with the first quarter of 2002. Within the group, IBM's sales of its WebSphere and DB2 middleware products increased 9%. On the downside, hardware sales fell 1%, to $5.8 billion, though IBM says sales of its Intel-based eServers increased.

IBM's healthy results amid a generally weak environment for technology spending surprised some analysts. "We thought we'd see more softness," says Technology Business Research analyst Bob Sutherland, "but they held the line."