Company reports tepid revenue growth in software and services, but strong sales in emerging markets such as India and China
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The 10 percent increase in hardware sales (11 percent adjusting for currency fluctuations) outpaced the tepid single-digit sales growth from the company's software and services operations.
IBM reported total revenue of $24.3 billion for the third quarter ended Sept. 30, up 3 percent from $23.6 billion in the third quarter of 2009. Net income reached $3.6 billion, up 12 percent from $3.2 billion one year earlier.
"Systems and Technology had its best growth in six years," said Mark Loughridge, IBM senior vice president and CFO, on a conference call with financial analysts Monday. Sales of Systems and Technology products, including mainframe, server and storage hardware, exceeded $4.3 billion dollars in the quarter compared to $3.9 billion in the same quarter last year.
Revenue from System x servers surged 30 percent in the quarter, IBM said, while sales of System z mainframes were up 15 percent. The latter got a boost early in the quarter when the company debuted its zEnterprise mainframe -- IBM's most powerful computer ever. Storage system sales grew 7 percent and revenue from microelectronics OEM deals increased 28 percent.
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