IBM Leads Earnings Pack

In the three months ended Sept. 30, IBM earned $1.52 billion, or 94 cents per share, on revenue of $21.5 billion. In the same period last year, IBM earned $1.55 billion, or 92 cents per share, on revenue of $23.3 billion. Comparisons are complicated, however, because last year&s figures included IBM&s Personal Computer division, which has since been sold to Lenovo. The year-ago quarter also included a one-time charge of $320 million from the settlement of a pension-related lawsuit.

Mark Loughridge, senior vice president and CFO of Armonk, N.Y.-based IBM, said in an earnings call that IBM&s SMB business was its strongest segment for the third quarter, with 10 percent revenue growth vs. the year-earlier period. In addition, revenue for iSeries servers was up 25 percent, pSeries was up 15 percent and xSeries grew 11 percent. XSeries sales were helped by a 90 percent year-over-year growth in blade servers, Loughridge said.

“We are seeing similar results in the third quarter, and we are off to a quick start in the fourth quarter,” said Kirk Zaranti, senior vice president of sales and marketing for the IBM division of Logicalis, a Bloomfield Hills, Mich., solution provider. “PSeries is leading all the brands. PSeries is driving some of the storage business as well. And blade server sales are smoking hot.”

Meanwhile, CDW last week reported record sales and earnings for its third quarter ended Sept. 30, led by a nearly 18 percent jump in data storage sales and almost 17 percent growth in desktops and servers. The Vernon Hills, Ill., direct marketer said net income reached $73.1 million, a 12.2 percent increase over the $65.2 million reported for third-quarter 2004. Revenue was $1.67 billion, up 10.2 percent over $1.51 billion last year.

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“Data storage was up about 17.8 percent; desktop and server revenue was up 16.6 [percent]; and network communication was up 15.7 [percent],” CDW Chairman and CEO John Edwardson told CRN. Software revenue grew just less than 15 percent for the period, but a drop in Microsoft rebates had an impact, he said.

Santa Clara, Calif.-based Intel, for its part, reported an earnings increase of 5 percent for the third quarter ended Sept. 30, driven primarily by processor sales. Net income was $2 billion, or 32 cents per share, vs. $1.91 billion, or 30 cents per share, a year ago. Revenue was $9.96 billion, up 18 percent year over year and 8 percent sequentially.

Intel President and CEO Paul Otellini said sales of mobile processors were strong. Despite Advanced Micro Devices& growing server market share, Otellini noted that Intel server processors did better than expected this year.