IBM sees sunny skies ahead

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International Business Machines Corp. records a revenue increase of 12% in software, hardware, and service lines. The revenue came from IBMs overseas sales as it benefited from currency trends.

Chief Financial Officer Mark Loughridge said that strong demand came from emerging markets. IBM posted double-digit revenue growth in 40 emerging markets, with overall growth-market performance outpacing developed nations by 10 percentage points. Revenue from services line in emerging markets rose 50%.

The second quarter, IBM posted a profit of $3.66 billion compared with $3.39 billion of previous year. The share price is $3 a share, up from $2.61 a share a year earlier. Revenue increased to $26.67 billion.

IBM complex businesses such as consulting and business software have helped to earn for a higher margin. IBM plans to invest in developing economies such as Brazil, Russia, India, and China.

The company has signed service contracts that totaled $14.3 billion in the quarter.

The company’s services backlog was $144 billion, up $15 billion from the previous year, though about $2 billion was due to currency effects.

IBM’s hardware business reported a 12% increase in revenue after currency adjustment. IBMs mainframe and servers have a strong demand. IBM has been fortunate in taking business from its rivals Oracle Corp and Hewlett Packard Co. The company said it won $300 million in business from 250 “competitive displacements” during the period.

IBM’s revenue from business analytics gained 20% in the first half. The company aims to get that to near 30% by the end of 2015.

Revenue from what the company calls growth markets such as Brazil, Russia, India and China rose 23% and accounted for 22% of total geographic revenue. Revenue in the Americas grew by 10%. Sales also rose in Europe, Asia, the Middle East, and Africa.

IBM in UAE

After relocating its regional headquarters to Dubai catering to Central and Eastern Europe, Middle East, and Africa, the company invested heavily in building data centres and software development centers. It employs about 15,000 across the region, known as Ceemea, plus another 12,000 employees in global delivery centres that serve customers around the world.

IBM also plans for further expansion in Abu Dhabi and Qatar.

IBM currently carry out advanced research through cloud computing at Carnegie Mellon University in Qatar, Qatar University, and Texas A &M University in Qatar.

Sources: itp.net, Wall Street Journal

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