IBM profits up 13 per cent on strong quarter

IBM profits rose 13 per cent in the first quarter

IBM has reported that its profits rose 13 per cent to $2.6bn (£1.7bn) in the first quarter of 2010.

Overall revenues grew five per cent, but currency fluctuations left them pretty much flat. The company saw growth in all areas and regions, but software sales outpaced other sectors.

"In the first quarter, we drove significantly improved revenue growth rates from the fourth quarter across our businesses and geographies," said Sam Palmisano, IBM chairman, president and chief executive.

"Looking ahead, we are confident in our ability to grow revenue and, given our mix of higher-value business and productivity, we will expand margins, grow profit, cash and EPS, and increase returns to shareholders."

Mark Loughridge, IBM's chief financial officer, highlighted the growth in UK sales in a call to analysts. Sales in the UK grew eight per cent, the highest rate in the G7, compared to six per cent in the Americas, five per cent in Europe and four per cent in Asia/Pacific.

The software side of IBM's business showed the strongest growth at 11 per cent, while systems and technology revenue rose five per cent. Middleware was the strongest card in IBM's software portfolio, seeing sales up 13 per cent.

New signings for IBM's services sector fell by two per cent. This was down to companies holding off on longer term signings, Loughridge said. In particular application management signings fell 23 per cent, dragging down the entire division.