IBM Software Shift Lets Company Boost Annual Profit Forecast |
| San Francisco Chronicle - Jul 19, 2012 |
International Business Machines Corp.’s decadelong shift to higher-margin software sales helped the company overcome a slowdown in technology spending last quarter and boost its full-year earnings forecast.
Excluding some items, profit will increase to at least $15.10 a share this year, up from a previous forecast of $15, Armonk, New York-based IBM said yesterday in a statement. Analysts had predicted $15.06 on average, according to data compiled by Bloomberg. Earnings were $3.51 in the quarter, topping the $3.43 average estimate, even as sales declined.
IBM, the world’s biggest computer-services provider, aims to get half of its earnings from software by 2015 -- a move away from less-profitable hardware and services. Chief Executive Officer Ginni Rometty sees an opportunity for growth by selling software in developing economies and creating programs that work with cloud computing and business analytics.
“This quarter certainly suggests that the software play was a good idea,” said Andrew Bartels, an analyst with Cambridge, Massachusetts-based Forrester Research Inc. “The margins are much better than in other categories, and there are signs that demand may start to get stronger in the second half of the year.”
Read Full Article from San Francisco Chronicle
- Posted: 2012-07-19 12:51:36
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