IBM Profits Rise 14% in Third Quarter

By Darryl K. Taft  |  Posted 2009-10-16 Print this article Print

IBM announced that its third-quarter 2009 profits were up 14 percent to $3.2 billion compared to $2.8 billion for the same period in 2008.

IBM announced that its third-quarter 2009 profits were up 14 percent to $3.2 billion compared to $2.8 billion for the same period in 2008.

Despite the boost in net income, IBM's overall revenues decreased by seven percent compared to the same period last year, but revenues increased one percent over IBM's second quarter 2009 numbers.

Again, as with recent quarterly results, IBM touted its move to higher-value deals as key to improving the company's bottom line. And during a conference call with analysts, Mark Loughridge, IBM's senior vice president and chief financial officer, said he expects IBM to see an increase in revenue in the fourth quarter of 2009.

"Our long-term strategic shift to higher-value businesses again enabled us to deliver outstanding margin, earnings and cash flow growth in the third quarter," said Samuel J. Palmisano, IBM chairman, president and CEO, said in a statement. "We also saw improved revenue trends in our business and share gains in software and hardware. We continued to invest for growth in areas where clients see potential for value creation including Smarter Planet solutions, cloud computing and advanced business analytics."

IBM said it gained market share in WebSphere, Information Management, Tivoli and Rational software during the third quarter.

Revenues from IBM's Software Group were $5.1 billion, a decrease of 3 percent. However, revenues from IBM's key middleware products, which include WebSphere, Information Management, Tivoli, Lotus and Rational products, were $2.9 billion, an increase of 2 percent when compared to the third quarter of 2008.

Revenues from IBM's WebSphere family of products increased 14 percent year over year. Revenues from IBM's Information Management software were flat. Revenues from Tivoli software increased 5 percent, and revenues from Lotus software decreased 9 percent. And revenues from IBM's Rational tools software increased 2 percent.

Meanwhile, IBM's total Global Services revenues decreased 7 percent. IBM's Global Technology Services segment revenues decreased 4 percent to $9.4 billion. And the company's Global Business Services segment revenues decreased 11 percent to $4.3 billion.

In addition, revenues from IBM's Systems and Technology division dropped 12 percent to $3.9 billion. 

Darryl K. Taft covers the development tools and developer-related issues beat from his office in Baltimore. He has more than 10 years of experience in the business and is always looking for the next scoop. Taft is a member of the Association for Computing Machinery (ACM) and was named 'one of the most active middleware reporters in the world' by The Middleware Co. He also has his own card in the 'Who's Who in Enterprise Java' deck.

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