First-quarter profits rose 16 percent at IBM Corp and matched Wall Street estimates Thursday, though rebounding corporate spending and weakness in the dollar helped the technology bellwether exceed revenue forecasts.
IBM earned US$1.60 billion, or US$0.93 per share, on revenue of US$22.3 billion in the first three months of the year. In the comparable period last year, IBM made US$1.38 billion, or US$0.79 a share, on US$20.1 billion in revenue.
Analysts surveyed by Thomson First Call were expecting IBM to show earnings of US$0.93 per share and revenue of US$21.9 billion, but some talk of an ``upside surprise'' had bubbled up on Wall Street in recent days.
In earlier reports to investors, IBM executives had expressed optimism that corporate technology spending would start a new growth cycle this year.
``This quarter's results reaffirmed this view,'' John Joyce, IBM's chief financial officer, said in a conference call with analysts. ``Overall we are pleased with IBM's position.''
IBM's 11 percent increase in quarterly revenue included a 15 percent gain in sales to small and medium-sized businesses, which has been a closer focus of late.
But the overall revenue rise would have amounted to just 3 percent without currency fluctuations. Weakness in the US currency inflates the dollar value of sales in other currencies.
IBM's services division, which accounts for half of the company's sales, showed a 9 percent gain in revenue, though the increase would have been only 1 percent without currency fluctuations. IBM said the unit booked US$10 billion in new contracts in the quarter.
Big Blue tinkered with its internal alignment in the quarter, bringing the money-losing technology group, which makes high-end chips, into the successful systems group, which sells mainframes and servers. IBM also announced that it would share chip designs and collaborate more with outside developers in hopes of getting its semiconductors into wider use.
Combined, the systems and technology group showed an operating profit of US$170 million in the first quarter. On its own, the technology group would have lost US$150 million, Joyce said.
Separately, Sun Microsystems Inc posted a larger-than-expected loss in its fiscal third quarter as the computer and software maker continued to lay off workers and reorganize amid blistering competition from rivals.
Sun reported a net loss Thursday of US$760 million, or US$0.23 per share, compared to net income of US$4 million, or break-even per share, in the same quarter last year. The company reported revenue of US$2.65 billion, down 5 percent from US$2.79 billion in the same period of last year.
The Santa Clara-based company spent more than US$200 million during the quarter ending March 28 to pare its 36,000-member work force and reduce real estate costs around its pricey Silicon Valley headquarters. Chief executive Scott McNealy announced earlier this month that Sun would slash 3,300 jobs, or 9 percent of its staff.
Excluding special expenses, Sun lost US$260 million, or US$0.08 a share. Wall Street analysts polled by Thomson First Call were expecting Sun to report a third-quarter loss of US$190 million, or US$0.07 per share, on revenue of US$2.65 billion.
NO HUMAN ERROR: After the incident, the Coast Guard Administration said it would obtain uncrewed aerial vehicles and vessels to boost its detection capacity Authorities would improve border control to prevent unlawful entry into Taiwan’s waters and safeguard national security, the Mainland Affairs Council (MAC) said yesterday after a Chinese man reached the nation’s coast on an inflatable boat, saying he “defected to freedom.” The man was found on a rubber boat when he was about to set foot on Taiwan at the estuary of Houkeng River (後坑溪) near Taiping Borough (太平) in New Taipei City’s Linkou District (林口), authorities said. The Coast Guard Administration’s (CGA) northern branch said it received a report at 6:30am yesterday morning from the New Taipei City Fire Department about a
IN BEIJING’S FAVOR: A China Coast Guard spokesperson said that the Chinese maritime police would continue to carry out law enforcement activities in waters it claims The Philippines withdrew its coast guard vessel from a South China Sea shoal that has recently been at the center of tensions with Beijing. BRP Teresa Magbanua “was compelled to return to port” from Sabina Shoal (Xianbin Shoal, 仙濱暗沙) due to bad weather, depleted supplies and the need to evacuate personnel requiring medical care, the Philippine Coast Guard (PCG) spokesman Jay Tarriela said yesterday in a post on X. The Philippine vessel “will be in tiptop shape to resume her mission” after it has been resupplied and repaired, Philippine Executive Secretary Lucas Bersamin, who heads the nation’s maritime council, said
REGIONAL STABILITY: Taipei thanked the Biden administration for authorizing its 16th sale of military goods and services to uphold Taiwan’s defense and safety The US Department of State has approved the sale of US$228 million of military goods and services to Taiwan, the US Department of Defense said on Monday. The state department “made a determination approving a possible Foreign Military Sale” to the Taipei Economic and Cultural Representative Office in the US for “return, repair and reshipment of spare parts and related equipment,” the defense department’s Defense Security Cooperation Agency said in a news release. Taiwan had requested the purchase of items and services which include the “return, repair and reshipment of classified and unclassified spare parts for aircraft and related equipment; US Government
More than 500 people on Saturday marched in New York in support of Taiwan’s entry to the UN, significantly more people than previous years. The march, coinciding with the ongoing 79th session of the UN General Assembly, comes close on the heels of growing international discourse regarding the meaning of UN Resolution 2758. Resolution 2758, adopted by the UN General Assembly in 1971, recognizes the People’s Republic of China (PRC) as the “only lawful representative of China.” It resulted in the Republic of China (ROC) losing its seat at the UN to the PRC. Taiwan has since been excluded from