Sales in the global-services division increased 5.4 percent, and software rose 9.7 percent, the company said.
Gross margin, or the percentage of sales left after paying production costs, rose 0.8 percentage points, although expenses as a portion of sales rose 2.6 percentage points to 25.1 percent, IBM said. Sales in the Americas fell 6 percent to US$9.1 billion, and revenue dropped 5 percent to 4.1 billion in the Asia-Pacific region. Sales gained 1 percent to US$5.7 billion in Europe, the Middle East and Africa.
"Outsourcing remains strong," Joyce said. "Our opportunity pipeline in the fourth quarter is as strong as we've ever seen." He said outsourcing contracts totaled US$10 billion in the third quarter, and the backlog of recurring revenue rose to US$97 billion, from US$95 billion in the previous period.
Desktop computer sales declined 30 percent and ThinkPad notebook sales dropped 28 percent from a year ago, though the profit margins are so small that the impact on the company's overall profit is negligible, Joyce said.
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