Industry Bits
Bytes from System iNEWS editors
July 21, 2008
IBM Knocks Out Investor Expectations in Q2 2008
IBM reported last week its second quarter financial results for 2008, zooming past Wall Street estimates to the obvious delight of Mark Loughridge, IBM's chief financial officer.
Total revenues for Q2 2008 were $26.8 billion, an increase of 13 percent. Second-quarter income was $2.8 billion compared with $2.3 billion the previous quarter. Income increased 22 percent over the second quarter of 2007.
In a conference call with investors last week, IBM Chief Financial Officer Mark Loughridge said IBM was "ahead of track" in its gains for the quarter. "I've got to say that this is one of the best quarters I've ever seen, and remember we delivered an outstanding second quarter a year ago. So these are truly powerful results."
Systems & Technology revenues of $5.2 billion were up 2 percent year to year. But--expectedly--System i revenue declined 47 percent in the quarter, as IBM transitions the System i customer base to the converged POWER platform.
Encouragingly, converged System p grew 29 percent, and midrange growth accelerated by 68 percent. "The decline in the System i was more than offset by the jump in System p revenues," says Bob Djurdjevic, president of Annex Research. "Now that these two lines are being integrated, what matters to IBM is how the revenues are doing in the aggregate. And that's a net positive."
High-end servers grew 21 percent, driven by the new POWER6 595 announced early in the second quarter. System x server revenue declined 5 percent, and storage revenue was up 12 percent.
Loughbridge is confident in the continued growth of the Power market, saying that "with POWER6 performance now available across the entire product line, this platform is well positioned to sustain its technical and market leadership as we enter the second half."
In a further breakdown of IBM's business segments, total Global Services-related revenue was $15.2 billion, up 16 percent as reported.
--Erin Bradford, systems management & availability editor
Posted by rsanders at July 21, 2008 9:14 AM
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