IBM results bode well for 2009

IBM has remained buoyant during the downturn

IBM has reported a stronger than expected fourth quarter, with profits up 12 per cent to $4.4bn (£3.1bn).

Revenues were down six per cent on last year at $27bn (£19bn), but fell by just one per cent when adjusted for currency fluctuations, according to the company.

"A strong fourth quarter capped an outstanding 2008, and IBM performed well in an extremely difficult economic environment," said Sam Palmisano, IBM chairman, president and chief executive.

"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."

However, there were some worrying signs. Hardware revenues fell 18 per cent, mainframe revenue six per cent, and lower-end servers 32 per cent.

IBM's most important sector, services, were down four per cent, but the company said that it had signed $17.2bn (£12.4bn) worth of new contracts.

Palmisano also pointed out that IBM is recruiting at a time when many are laying staff off. The company now has 400,000 employees for the first time in almost 20 years.