IBM, describing business in the third quarter as mixed, today reported net profit of $US1.8 billion, or 93 cents a share for the three-month period that ended September 30.
The third quarter results include an after-tax benefit of $63 million, or 3 cents per share, resulting from several actions, specifically, the closing of IBM's sale of its Global Network in a number of regions. The company also completed three acquisitions, resulting in charges for research and development, IBM said.
Revenue for the quarter was $21 billion, a 5 per cent increase over 1998 third quarter revenue, the company said in a release issued after the close of trading on the New York Stock Exchange.
Traders showed renewed enthusiasm for technology sector stocks today following a strong quarterly earnings report yesterday from Microsoft as several technology stocks rallied. IBM, however, closed down 12 cents at 107.
Louis Gerstner, chairman and chief executive officer of IBM, called the quarter "decidedly mixed," listing a slowdown in year-2000 products and services toward the end of the quarter and a shortage in flat panel displays among the factors that affected earnings negatively.
Services, software other than operating systems and manufacturing had positive impacts on earnings, Gerstner said.
IBM expects the year-2000 slowdown to continue having an impact on earnings in the fourth quarter and in the first quarter of next year, but Gerstner said next year has the potential to be a very good year for IBM once it's beyond any lingering Y2K effects.