IBM first-quarter profits leap to $2.9bn

IBM and Intel have offered strong signs that the technology sector has recovered from the recession, posting strong profit and revenue results on Tuesday across all product lines.

IBM posted a healthy 10 per cent jump in profit for its first quarter of $2.9bn.

The largest computer services vendor achieved a five per cent rise in revenue in the quarter to $24.6bn, after currency gains were considered. The company’s earnings per share grew more, by 17 per cent, to $2.31.

Big Blue performed strongly across all areas of its business. The biggest jumps in sales were seen in its System z mainframe division, which leapt by 41 per cent, and in its business analytics software, which increased by 20 per cent.

“We delivered a strong first quarter with revenue growth across hardware, software and services and with more than 40 countries growing in double digits,” said Sam Palmisano, IBM chairman, president and chief executive.

Meanwhile, Intel performed better than analysts expected during its first quarter, with revenue growth up 12 per cent to $12.8bn. The chipmaker’s profit and earnings per share remained flat at $3.2bn and 56c respectively.

Intel had lowered its revenue forecasts in January after admitting to a design problem in its Sandy Bridge chipset. Also, analysts had speculated that the current crisis in Japan would disrupt Intel's processor plans, although Intel maintained that its revenue would not be affected.

“The first-quarter revenue was an all-time record for Intel fuelled by double-digit annual revenue growth in every major product segment and across all geographies,” said Paul Otellini, Intel president and chief executive.

Otellini said that the company is now in a position to achieve greater than 20 per cent annual revenue growth.