IBM Reports Quarterly Profit Up, WebSphere Up, System z Slips

BM announced second-quarter 2009 net income at $3.1 billion, a 12% increase over $2.8 billion in the second quarter of 2008. Total revenues for the second quarter of 2009 of $23.3 billion decreased 13% (7%, adjusting for currency) from the second quarter of 2008.

Revenues from the Systems and Technology segment totaled $3.9 billion for the quarter, down 26% (22%, adjusting for currency). Systems revenues decreased 26% (22%, adjusting for currency). Revenues from the converged System p products decreased 13% compared with the 2008 period. Revenues from System z mainframe server products decreased 39% compared with the year-ago period. Total delivery of System z computing power, which is measured in MIPS (millions of instructions per second), decreased 20%. Revenues from the System x servers decreased 22%. Revenues from System Storage decreased 20%, and revenues from Retail Store Solutions decreased 41%. Revenues from Microelectronics OEM decreased 23%.

"We have continued our strategic investments in Smarter Planet solutions, business analytics and next generation data centers," according to Samuel Palmisano, IBM chairman, president and chief executive officer. "As a result we are optimistic about how IBM is positioned to make the most of current growth opportunities as well as those that emerge as the economy recovers. We are well ahead of pace for our 2010 roadmap."

The company expects full-year 2009 pre-tax income for its software segment to grow at a double-digit rate and reach approximately $8 billion. Revenues from the software segment were $5.2 billion, a decrease of 7% (flat, adjusting for currency) compared with the second quarter of 2008. Revenues from IBM's key middleware products, which include WebSphere, Information Management, Tivoli, Lotus and Rational products, were $3.0 billion, a decrease of 2% (up 5%, adjusting for currency) versus the second quarter of 2008. Revenues from the WebSphere family of software products increased 8% year over year. Revenues from Information Management software decreased 4%. Revenues from Tivoli software decreased 2%, and revenues from Lotus software decreased 14%. Revenues from Rational software, integrated tools to improve the processes of software development, decreased 2%.

Total Global Services revenues decreased 12% (4%, adjusting for currency); pre-tax income increased 23%. Global Technology Services segment revenues decreased 10% (2%, adjusting for currency) to $9.1 billion. Global Business Services segment revenues decreased 15% (9%, adjusting for currency) to $4.3 billion.

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