Amid gloom, IBM sees sunny forecast
Big Blue releases preliminary earnings, saying earnings per share and net income for the third quarter were up about 20 percent over the previous year.
While much of the tech sector is bemoaning a sluggish economy, Big Blue sees blue skies ahead. IBM on Wednesday announced positive preliminary earnings for the third quarter of 2008.
IBM said earnings per share were at $2.05 for the quarter, up 22 percent from the same period last year. Net income rose 20 percent to reach $2.8 billion, while revenue rose 5 percent to $25.3 billion.
"It is very nice to see some positive news, not just for IBM but for--to a degree--the tech space overall, given the downdraft we have seen in recent weeks," Chuck Jones, a technology analyst for Atlantic Trust Private Wealth Management, told Reuters.
IBM is also optimistic about results for the rest of the year. In its statement, the company reaffirmed its outlook for the full year, saying it continues to expect earnings per share of at least $8.75 for the fiscal year 2008, showing growth of 22 percent over 2007.
Big Blue said its year-to-date free cash flow was approximately $6.4 billion at the end of the quarter and its cash balance was $9.8 billion.
"For companies to be reaffirming their outlook through the end of the year is h-u-g-e," Mike Holland, chairman of investment company Holland & Co., told Reuters.
"In this environment, the combination of meeting current expectations but also reaffirming their outlook is an incredible performance," he said. "You made my evening," he told Reuters.
IBM says it will offer more details in its regularly scheduled Webcast, which is planned for October 16.
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