IBM reaffirms strong 2009 outlook
SAN FRANCISCO -- IBM Corp. is standing by its surprisingly strong 2009 guidance, backing a $9.20-per-share profit forecast on momentum in emerging markets and services and software so far this year. Shares jumped nearly 5 percent.
The Armonk, N.Y.-based company's chief financial officer, Mark Loughridge, told a conference in San Francisco on Thursday that IBM is on track to hit its financial targets based on encouraging numbers from January.
IBM's annual forecast, unveiled last month, stunned investors, coming in 45 cents per share ahead of analysts' projections and at a time when other technology companies like Hewlett-Packard Co. and Intel Corp. are cutting their forecasts.
IBM gets most of its profit from selling services and software to large companies. Those are two areas that have held up well because companies are locked into steady, annuity-like payments to IBM, and view investments in those areas as a way to save money. IBM's hardware business, however, has been hurt by the recession.
IBM said in a regulatory filing Thursday that results from January were in line with what the company expected, allowing it to reaffirm its earnings guidance.
Sales growth in emerging markets was in line with 2008's figures, and IBM has scored "strong double-digit growth" in long-term services signings so far this year. The company added that it has a "good pipeline of software opportunities."
Shares rose $3.81, or 4.4 percent, to $89.71 in late morning trading Thursday.