Google, IBM Q3 financial results beat expectations

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Google, IBM Q3 financial results beat expectations

Warwick Ashford

Google and IBM are the latest technology sector companies to report higher-than-expected third-quarter results, providing further evidence of global economic recovery.

Google is among only a few technology companies reporting actual revenue growth, but results from IBM, Intel and AMD have all exceeded analyst expectations.

Google's net revenue in the third-quarter rose 8.5% from a year earlier to $4.38bn, beating the $4.24bn expected by analysts.

Net income was $1.64bn compared with $1.29bn a year earlier and profit per share was $5.89, beating the $5.42 expected by analysts, according to Thomson Reuters.

Eric Schmidt, chief executive at Google, said although there is still uncertainty about the pace of economic recovery, Google believes the worst of the recession is over.

"We now feel confident about investing heavily in our future," he said.

Analysts said advertisers are starting to invest in the fourth quarter, encouraged to spend online by an upturn in e-commerce.

IBM raised its full-year outlook and reported higher-than-expected quarterly profit on higher-margin software and services.

IBM reported third-quarter net profit rose to $3.2bn or $2.40 a share, beating average analyst expectations of $2.38 a share, according to Thomson Reuters.

Revenue fell 7% compared with the same period a year ago to $23.6bn, but was up 1% on the previous quarter and was better than the $23.4bn expected by analysts.

IBM forecast a return to revenue growth in the fourth quarter and said it was ahead of schedule to achieve its target earnings of at least $10-a-share next year.

Intel led the run of good tech sector results by exceeding market expectations on Tuesday, as did rival AMD later in the week.

The extent of the turnaround for the technology sector will become clearer next week when Apple and Microsoft are due to issue third-quarter financial results.

The only exception this week to the positive trend is Nokia, which reported a third-quarter loss $834m after a $1.4bn write-down at its joint venture network unit Nokia Siemens.


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