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April 22, 2009

IBM Q1 revenue dips 11% to $22bn

Systems and technology revenue fell 24% to $3.22bn

By CBR Staff Writer

IBM has reported a 1% decline in net income to $2.29bn for the first quarter 2009, compared to $2.31bn in the year-ago quarter, on revenue down 11% at $21.71bn.

Operating income during the quarter fell 2% to $3.12bn, while diluted EPS grew 4% to $1.70. Total services signings grew 10%, with longer-term signings up 27%. Free cash flow generated was $1bn.

Technology services revenue fell 10% to $8.75bn, while business services revenue fell 10.5% to $4.4bn. Systems and technology revenue fell 24% to $3.22bn, and software revenue fell 6% to $4.53bn. Global financing revenue fell 9% to $578m, while revenue from others fell 1% to $213m.

Geographically, Americas revenue fell 7% to $9.3bn, EMEA revenue fell 18% to $7.2bn, and Asia Pacific revenue fell 6% to $4.8bn. OEM revenue fell 34% to $461m, and revenue from the company’s growth markets organization decreased 12%, representing 17% of geographic revenue.

Sam Palmisano, chairman, president and chief executive at IBM, said: IBM continued to perform well in a very difficult economic environment. 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. We remain ahead of pace for our 2010 roadmap of $10 to $11 per share.

Looking ahead the company reaffirmed its outlook for a full0year profit of at least $9.20 per share.


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