IBM Corp finished its fiscal year with solid fourth-quarter results that reflected another strong performance in services. Big Blue posted net income for the quarter that rose 12.1% to $2.35bn on revenue that rose 5.9% to $25.13bn. Earnings per share, meanwhile, rose 17.1% to $2.47, thanks to the company’s aggressive and ongoing share repurchase policy. That was enough to beat the $2.45 consensus estimate of analysts surveyed by First Call but appears to have fallen short of some whisper numbers on the Street. For the full year, net income rose 3.9% to $6.33bn on revenue up 4.0% at $81.67bn. Earnings per share rose 9.3% to $6.57 for the year. Services led the top line surge for the quarter, as revenues for the business rose 20.1% to $7.07bn and the unit signed more than $9bn in new contracts in the quarter. Software also had a strong showing, with revenues rising 9.4% to $4.13bn and carrying a gross margin of $75.2%. IBM says those two areas of the overall picture are increasingly important – and now account for nearly 60% of the company’s overall gross profit – as the company continues to push down the e-business path. Total hardware sales declined 1.5%, meanwhile, to $11.3bn and maintenance revenues dipped 3.0% to $1.55bn. The strong results were achieved, the company points out, despite continued weakness in Asia and Latin America, ongoing softness in memory chip prices, and pricing pressures and product transitions that adversely affected its server business. Geographically, fourth- quarter revenues from North America were $11.3bn, up 8% year- over-year, while revenues from Europe/Middle East/Africa were up 13% at $8.7bn. Asia-Pacific revenues fell 3% to $4.2bn and revenues from Latin America plunged 22% to $929m. Total gross margin, meanwhile, was 39.0%, down from 40.1% in the year-ago period. The company says it spent roughly $1.6bn on share repurchases in the quarter. Total hardware revenues for the full year were down 4% at $34.7bn, while services revenues totaled $23.4bn, an increase of 21%. Software revenues rose 5% to $13.5bn. Maintenance revenues fell 7% to $6.0bn. IBM generated $9.3bn in cash from operations in 1998 and finished the year with $5.8bn in cash.
