IBM posted quarterly results on Monday showing 9 percent revenue growth from last year and slight earnings growth, despite a US$320 million charge it took during the quarter to settle some claims in a lawsuit over its pension plan.
IBM's Global Financing revenue dropped 11 percent from last year's third quarter, but all of IBM's other business lines showed revenue growth, contributing to total revenue from continuing operations for the quarter of US$23.4 billion, in line with the consensus estimate of analysts polled by Thomson First Call.
Armonk, New York-based IBM had net income for the quarter of US$1.8 billion, up 1 percent from last year's third quarter. Per-share earnings would have been US$1.17 without the lawsuit settlement charge, ahead of the US$1.14 consensus forecast of Thomson First Call. Including the charge, IBM had per-share earnings of US$1.06.
IBM's Hardware group showed the strongest growth, with revenue increasing 12 percent to US$7.5 billion. Global Services remained IBM's most lucrative unit, with revenue of US$11.4 billion, up 10 percent.
The Global Services group suffered a high-profile setback in September when JPMorgan Chase & Co. canceled the remaining five years of a seven-year outsourcing deal valued at US$5 billion, but IBM said at the time the cancellation would not affect its financials for the quarter, which ended Sept. 30. IBM said Monday it signed US$10 billion in services contracts during the quarter and now has a backlog of US$110 billion in contracted future services. That's a slight decrease from IBM's US$118 billion backlog at the end of its second quarter.
IBM's Software group increased its revenue to US$3.6 billion, up 5 percent from last year's third quarter, with revenue for IBM's Tivoli infrastructure software growing 19 percent and its DB2 database software growing 15 percent. Revenue from Lotus, IBM's collaboration and messaging software, dropped 6 percent.