Six-year high for IBM's Q2 revenue growth

Six-year high for IBM's Q2 revenue growth

IBM chairman, CEO and President Sam Palmisano declared the vendor's second-quarter fiscal 2007 financial results the company's best growth performance in six years.

This quarter's strong revenue growth -- "our best since 2001" -- shows IBM's global reach and the value customers are placing on the company's expanded software line and services, he said in a statement. Palmisano added that IBM is well on its way to achieving its goals for growth through 2010, making "solid progress" on its road map for the next three years.

For the second quarter of fiscal 2007, which ended June 30, IBM reported a rise in net income of 11.8 percent over the year-ago quarter to US$2.3 billion on revenue up 9 percent to $23.8 billion. Earnings per share (EPS) grew 19 percent to $1.55, compared to the same quarter a year ago.

A consensus estimate of Thomson Financial analysts, which didn't include the pre-tax gain, was that IBM would report revenue of $23.1 billion on an EPS of $1.47.

IBM's revenue from the Americas rebounded during the quarter to grow six percent on the year-ago quarter to $10.1 billion, while revenue from Europe, the Middle East and Africa rose 13 percent to $8.2 billion and Asia-Pacific revenue was up 10 percent to $4.6 billion.

IBM's systems and technology division saw revenue growth of just two percent to reach $5.1 billion, while the vendor's software business increased revenue by 13 percent to $4.8 billion.

Significant events for IBM occurring in the second quarter included Inc. paying the vendor an undisclosed amount of money to settle all outstanding patent lawsuits between the two companies. They also signed a long-term patent cross-licensing agreement to end a dispute that began in 2002 and made it to the courts last year when IBM sued and then the online retailer countersued, with both parties alleging that the other had infringed on its patents.

IBM also began shipping its new dual-core Power6 microprocessor on a new midrange server, the System p 570, and started talking up blade and mainframe offerings for small to midsize businesses. The vendor also put the next major release of its DB2 database, currently known as Viper 2 and due to ship before the end of the year, into open beta testing

On the acquisitions front, IBM made two purchases in June to add functionality to its Rational development tools family. The vendor first acquired Web application security vendor Watchfire for an undisclosed sum and then announced plans to buy Swedish software development tools company Telelogic AB for $745 million.

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