IBM Profit Matches Last Week's Pre-announced Results

CNBC.com with Wires
Thursday, 16 Oct 2008 | 4:59 PM ET

International Business Machines said its third-quarter profit jumped nearly 20 percent, surpassing analysts' estimates. However, slumping hardware sales hurt the technology company's revenue, which missed Wall Street's forecast.

The reported results came out in line with pre-announced figures the company gave last week.

IBM Sign
Aaron Brown: Photography
IBM Sign

Excluding one-time items, the technology services company said it earned $2.05 a share on sales of $25.3 billion in the third quarter, against earnings of $1.68 a share on a topline of $24.119 billion last year.

Just last week, IBM said it earned $2.05 per share in the July-September period and that sales increased 5 percent to $25.3 billion. At the time, IBM's profit was 4 cents per share above Wall Street estimates, although sales were $1 billion below consensus.

In a closely watched indicator, IBM signed $12.7 billion in new services contracts in the quarter, down 4 percent, which still showed it was able to lock in lots of new business despite the tough economic times. Short-term contract signings were up 13 percent to $6.1 billion.

IBM gets about half its revenue from annuity-like payments flowing from contracts it may have inked months or years ago for services like consulting or technology outsourcing.

  • Video: Dan Morgan, Synovus Securities discusses the results

Analysts adjusted their forecasts after IBM's pre-announcement to a profit of $2.03 a share on sales of $25.878 billion, according to a consensus compiled by Thomson Reuters.

Shares of IBM , which completed regular New York Stock Exchange trading up 3.66 percent at $91.52 on Thursday, edged more than 1.5 percent higher after market hours.

IBM's shares fell by more than 25 percent between the end of September and its 52-week low of $83.51 on Oct. 10. The stock has since rebounded off the worst of those declines.

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