IBM Profits Rise But Investors Still Worried

October 22 00:00 2011

New York, Oct 22, 2011 ( – IBM’s Q3 profits rose 7% which is not enough to satisfy investors as shares started plummeting suggesting that the growth was less than investor expectations. IBM (NYSE: IBM) announced an Earning Per Share (EPS) of $3.19 wherein analysts had projected an EPS of $3.22. Thus investors quickly sold off the shares. Analysts are worried that this may be the hit towards a larger slowdown in IT spending.

The good news is that IBM’s profit increased almost 17% from the emerging markets. Brazil, China and India are increasingly accounting for a larger portion of IBM’s revenues and are inching closer to becoming its strategic markets.

IBM’s hardware revenue was $4.5 billion. This was dwarfed by its global services revenue which amounted to $10.3 billion. The Websphere family of products accounted for 52% of the middleware segement revenue. Middleware has been IBM’s forte for quite some time and accounts for a large portion in its revenue. Meanwhile the sales from the cloud had also doubled.

Although IBM’s results cannot be called as disappointing, they have failed to meet market expectations which were set very high considering technology spending in the present day economic climate.