IBM Announces Third Quarter Earnings

Big Blue was less than blue as it announced itsearnings yesterday. Although earnings per share were down 17% from a year ago,the company remains wildly profitable.

IBM Corp. said itearned $1.6 billion on revenue of $20.4 billion, or ninety cents a share.Analysts expected IBM to earn eighty-nine cents a share, so Big Blue beatexpectations. The projections were cut in the wake of the September 11 terroristattacks.

The strongest area for IBM remains its services unit.The division grew five percent. Excluding maintenance revenue, the servicesdivision grew seven percent.

Hardware remained a sore spot for IBM, which has quitselling PCs in retail outlets. Hardware revenue dropped a staggering 21percent, but there were bright areas, particularly in the enterprise. ZSeriesrevenue experience strong growth, as did midrange servers. Finally, enterprisestorage revenue grew 14%, a sharp contrast from competitor EMC Corp., which reported a billion-dollar loss.

IBM said that economic conditions were too unstable toread, so it could not begin to forecast its outlook for 2002. However, it saidthe fourth quarter should see some growth.