IBM, the world's largest supplier of computer hardware and IT services, topped estimates on Tuesday with third-quarter profits of $1.6bn, or 90 cents a share, on sales of $20.4bn.
This compares with $1.08 per share during the same quarter last year and is slightly up on the estimates of 89 cents per share on expected revenues of $20.86bn, according to analysts at First Call.
Wall Street analysts cut their earnings estimates following the 11 September terrorist attacks on the World Trade Center and the Pentagon.
John Joyce, chief financial officer at Big Blue, maintained that the third and fourth quarters would be "the bottom" for the company's chip business. "The fourth quarter will be challenging and it is extremely difficult to make predictions in the current environment, but we believe the current earnings consensus is reasonable," he said.
In spite of a slump in sales from its microelectronics business, the company said it has offset the weakness by gaining share in storage, high-end servers, software and services.
Joyce explained that IBM has slashed its inventory by 25 per cent and cut expenses in PC sales, which were down 29 per cent in the third quarter compared to a year ago.
For 2002, Big Blue said it remains upbeat. "When the economy recovers, we expect to be in an even stronger position," said Joyce.
IBM said its gross profit margin rose to 36.2 per cent in the third quarter from 35.4 per cent a year ago. The company's stock has risen 20 per cent this year.
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