The announcement came April 25 at IBMs annual shareholders meeting in Tulsa, Okla. At the meeting, the board also announced the company will buy back $4 billion worth of its stock.
The previous week, IBM announced annual revenue of $91 billion, up 3 percent over the previous years total, excluding IBMs divested PC business.
In the companys first quarter, IBM reported $20.7 billion in revenue and profit of $1.7 billion, which was up 21 percent from the companys disappointing first quarter of 2005 and is at its highest point since 1996.
At the shareholders meeting, CEO Samuel Palmisano described IBMs 2005 results as "solid," and the earnings per share for the first quarter as "excellent."
In his remarks, Palmisano said the performance was due to changes the company has been implementing since he took the reins in 2002.
"As I have reported to you in the past, we have transformed this company from top to bottom."
He listed several initiatives, including: a reorganization of the companys European management structure, which was designed to increase customer contact; the establishment of so-called "deal hubs," that bring together sales support and client services, a move that he said has increased the companys rate of customer wins; continued emphasis on middleware sales, which now make up more than half of software revenue.
"Your company is now better balanced, more productive and more profitable than it was just a few years ago," said Palmisano, adding that the uncertain times that followed the dot-com boom and bust have now receded.
"I am convinced that the head winds we faced as we entered this decade are now largely behind us," the IBM CEO said.
IBM took the occasion to announce several customer deals. IBM said oil refiner Citgo will use IBM servers and storage products, including IBMs TotalStorageDS 4800, x460, p570 and p520 and BladeCenter systems.
Citgo will run its trading and scheduling, supply chain management, human resources and finance operations on the IBM gear.
IBM also announced that Circuit City has signed a deal with IBM Global Services to overhaul the consumer electronics retailers merchandising and supply chain systems, using IBMs WebSphere Product Center middleware and Oracles Oracle Retail applications.
Financial terms of the deals were not disclosed.