Software sales and a weak dollar make up for hardware losses

IBM posts modest decline

Big Blue ended the first quarter of 2009 with net earnings of $2.3 billion, a decrease of just one per cent, year-on-year.

Gross revenue from its Systems and Technology segment declined by 23 per cent to $3.2 billion, with revenue from System X and Z mainframe products falling by 19 per cent and 27 per cent respectively.

Software sales perform better, however, with a decrease of just 2 per cent to $4.5 billion.

Despite declining revenue, IBM’s result have benefitted from a weak dollar, which benefits from global exports, and an ongoing cost cutting programme that has seen the company reduce its operating costs by $2 billion in the last year, as well as a shift in business focus.

“IBM continued to perform well in a very difficult economic environment, said IBM’s CEO, chairman and president, Samuel Palmisano. “This was due to our long-term strategic focus: shifting into software and services, divesting of commodity businesses, and creating solutions that help clients reduce cost and conserve capital. At the same time we have a disciplined approach to cost and expense management giving us a strong financial position.”

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