IBM has reported third-quarter net income of $1.6bn (£1.1bn), a drop of 19% compared with net income of $2bn in the third quarter in 2000. Revenues for the third quarter totalled $20.4bn (£14.1bn), down 6% from the previous year. The company cited double-digit growth in services and a strong quarter for software, but it said hardware revenues fell by 21%.
IBM chairman and chief executive officer, Louis Gerstner attributed the slowdown in hardware revenues to a "fundamental shift in customer buying behaviour that is altering our industry's landscape". He continued: "Customers now allocate an increasing percentage of their spending to solutions, not boxes."
Intel commits to slow growth
Intel has also announced third-quarter results with revenue of $6.5bn (£4.5bn), up 3% on its second quarter but down 25% from last year's third quarter in 2000. That is in line with what the company had predicted early September.
The chipmaker reported earnings of 10 cents per share, a decrease of 76% from the 41 cents per share it earned in third quarter of 2000 and off 17% from the second quarter of 2001.
Intel president and chief executive officer, Craig R Barrett, said the company had a solid quarter despite the ongoing economic slowdown. He cited strong demand for the company's Pentium 4 processor.
"Intel delivered solid third-quarter results in a turbulent environment, with revenue and microprocessor units up from the second quarter," Barrett said. "The actions taken to accelerate our desktop product road map have generated strong demand for the Intel Pentium 4 processor and the Intel 845 chip set platform."
"While economic conditions worldwide remain weak, we continue to strengthen our competitive position and expect to see moderate unit growth in microprocessors and flash memory in the fourth quarter," he added.
For the third quarter, the company reported that its net income, excluding acquisition-related costs, was $655m (£460m), down 77% from the same period last year.
Unisys announces job cuts
Hardware and services vendor Unisys announced it would cut 3,000 jobs and seek out other cost-cutting measures after seeing its third quarter net income fall by 53%.
The company reported that its third-quarter financial results, ending 30 September 2001, show a pro forma net income of $20.9m (£14.5m), down 53% from one year ago.
Third-quarter pro forma revenue was $1.38bn (£0.95bn), down 6% compared to pro forma revenue of $1.46bn a year ago.
"I was pleased by our profit performance under extraordinarily difficult circumstances this quarter," said Lawrence A Weinbach, chairman and chief executive officer of Unisys,. Weinbach said the terrorist attacks on 11 September " caused many potential Unisys customers to delay planned IT purchases.
"This resulted late in the quarter in a sharp falloff in expected orders for enterprise servers and for networking and systems integration projects," he said. "Still, we were able to meet our profit targets for the quarter by staying focused on closing certain key business deals and by continuing to aggressively control expenses."