Despite the improvement from IBM’s personal computer business, overall profits were weak in the company’s hardware operations: the gross profit margin on hardware sales for the first quarter was a dismal 29%, compared with 48% a year ago (a decline of 19% has been bandied about, but that came from someone that doesn’t understand percentages – it’s a fall of 19 percentage points or 39.6%); the overall gross margin was 39.5% in the first quarter, down from 50.8% a year ago; IBM’s tax rate was 25% in the first quarter, below the 45% rate IBM had indicated earlier; IBM told analysts to continue to expect the 45% rate for the rest of this year.
