Strike up the band, because when you hear about the IBM Corp. (IBM) news today, you’ll want to hear the Etta James’ song “At Last.”
The news is this: IBM posted strong financial results both for 2008 as a whole and the fourth quarter, and is actually bullish about the year ahead, in which it expects at least $9.20 per share in profit. The company’s chairman and CEO Samuel J. Palmisano said IBM anticipates 2010 profit to reach $10 to $11 per share.
"A strong fourth quarter capped an outstanding year,” Palmisano said. “In 2008 IBM performed well in an extremely difficult economic environment. Clearly our strategic transformation – migrating to the more profitable segments of the industry, investing in growth regions of the world, and driving productivity through global integration – is continuing to pay dividends."
Commenting on IBM’s guidance for 2009, an AP story on the news reads “the numbers were so far ahead of Wall Street's forecast they were initially met with disbelief.”
For 2008 IBM reported record revenue of $103.6 billion; record pre-tax profit of $16.7 billion; and record earnings per share of $8.93.
For the fourth quarter of 2008, IBM said, net income at the company was $4.4 billion, or $3.28 a share, up from $3.95 billion in the same period in 2007.
So how did IBM do it? By focusing more on high-margin customers and sales as part of its push to sell more high-value software and services. Cost cutting is also a key part of the equation; however, rather than doing widespread job cuts, the company has a strategy of continually eliminating positions in poorly performing areas and adding them in areas showing growth.
