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IBM reports flat net profits for third quarter

IBM has reported flat net profits of $3.8bn as demand for its software services and tight cost management offset the effect of a stronger dollar

IBM has reported flat net profits of $3.8bn as demand for its software services and tight cost management offset the effect of a stronger dollar.

IBM said that, excluding UK pension-related charges, profits rose 3% to $3.9bn in the third quarter.

Revenues at IBM came in at $24.7bn, down 5% on the same period a year ago, or just 2% adjusting for negative currency impact of nearly $1bn.

Currency-adjusted figures show software revenue up 3%; services revenue flat; systems and technology revenue down 12%; and growth markets revenue up 4%.

IBM said business analytics revenue was up 14% year to date; Smarter Planet revenue was up more than 20% year to date; and Cloud revenue year to date had exceeded full-year 2011 revenue.

"In the third quarter, we continued to drive margin, profit and earnings growth through our focus on higher-value businesses, strategic growth initiatives and productivity," said Ginni Rometty, IBM chairman, president and CEO.

 "Looking ahead, we see good opportunity with a strong product lineup heading into this quarter and annuity businesses that provide a solid base of revenue, profit and cash,” Rometty said.

Computer chip maker Intel has reported falls in both sales and profits in the third quarter, saying the results “reflected a continuing tough economic environment”.

Last week rival chip maker AMD announced it is expecting a 10% decline in sales in Q3 compared with Q2, ahead of the announcement of third quarter results on 18 October.

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