SHARE
Facebook X Pinterest WhatsApp

IBM Q4 a Bright Spot in Technology Company Earnings

In a rare bright spot on the technology company earnings front, IBM (NYSE: IBM) reported higher Q4 earnings — $4.4 billion or $3.28 per share, compared to $2.80 billion or $2.80 per share for the same period a year ago. However, revenue for Q4 fell to $27 billion from $28.9 billion in the same period […]

Written By
thumbnail Jessica Davis
Jessica Davis
Jan 21, 2009
Channel Insider content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More

In a rare bright spot on the technology company earnings front, IBM (NYSE: IBM) reported higher Q4 earnings — $4.4 billion or $3.28 per share, compared to $2.80 billion or $2.80 per share for the same period a year ago.

However, revenue for Q4 fell to $27 billion from $28.9 billion in the same period a year ago.

Analyst firm Bernstein Research says that the Q4 and short-term signings were better than expected, and surprisingly, short-term signings for financial institutions were up by 27 percent in Q4.

Senior Analyst A.M. Sacconaghi Jr. also noted that Q1 services appear well-positioned for growth, and that the company "appeared most bullish about its software business, stating that it felt it would grow profits double-digits year over year in 2009."

However, Sacconaghi tempers that optimism, advising investors to keep an eye on the company’s long term services business and other factors that could leave IBM vulnerable to a shortfall in revenues and earnings per share if its high margin, transactional businesses don’t finish strong in any given quarter.  Currency issues are also a wildcard, the firm cautioned.

"Many investors are likely to take IBM’s confidence as a testament to the fact that tech spending may not be quite as bad as may have worried," Sac writes in his report. "That said, we urge some caution." He notes that 65 percent of IBM’s revenues come from outside the United States and about 60 percent of its profits are recurring.

IBM expressed confidence in a prepared statement announcing its results.
"A strong fourth quarter capped an outstanding year," says Samuel Palmisano, president, chairman and CEO, in a prepared statement. "In 2008 IBM performed well in an extremely difficult economic environment. Clearly our strategic transformation — migrating to the more profitable segments of the industry, investing in growth regions of the world, and driving productivity through global integration — is continuing to pay dividends."

Palmisano says in the statement that the company is expects full-year 2009 earnings of at least $9.20 per share.

Revenues from the Software segment were $6.4 billion, an increase of 3 percent (9 percent, adjusted for currency) compared with the fourth quarter of 2007. Revenues from IBM’s middleware products, including WebSphere, Information Management, Tivoli, Lotus and Rational products, were $5.2 billion, up 4 percent versus the fourth quarter of 2007. Operating systems revenues of $622 million decreased 6 percent compared with the prior-year quarter, IBM said in its statement.

Hardware fared the worst among IBM’s technology groups. Revenues from the Systems and Technology segment totaled $5.4 billion for the quarter, down 20 percent (16 percent, adjusted for currency), IBM said in its statement. Systems revenues decreased 18 percent (14 percent, adjusted for currency). Revenues from System Storage decreased 20 percent, and revenues from Retail Store Solutions decreased 28 percent. Revenues from Microelectronics OEM decreased 34 percent, according to IBM.

Global Financing segment revenues decreased 1 percent (up 5 percent, adjusting for currency) in the fourth quarter to $660 million.

For the full year IBM reported diluted earnings per share of $8.93, up 24 percent; total revenues of $103.6 billion, up 5 percent –or 2 percent adjusted for currency.

For the full year, Global Technology Services revenues climbed 9 percent – 6 percent adjusted for currency. Global Business Services revenues grew 9 percent –5 percent adjusted for currency. And software revenues were up 11 percent – or 8 percent adjusted for currency.

 

Recommended for you...

Exterro Debuts Agentic AI Tools for Data Risk and E-Discovery 
Jordan Smith
Aug 26, 2025
Multi-OEM Strategies & More Key to Infrastructure in AI Era
Victoria Durgin
Aug 26, 2025
Kendra Krause on New Role at ThreatDown & Channel Goals
Victoria Durgin
Aug 25, 2025
SailPoint Intros Accelerated Application Management Solution
Jordan Smith
Aug 22, 2025
Channel Insider Logo

Channel Insider combines news and technology recommendations to keep channel partners, value-added resellers, IT solution providers, MSPs, and SaaS providers informed on the changing IT landscape. These resources provide product comparisons, in-depth analysis of vendors, and interviews with subject matter experts to provide vendors with critical information for their operations.

Property of TechnologyAdvice. © 2025 TechnologyAdvice. All Rights Reserved

Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.