IBM rises as profit tops estimates on mainframe sales

INTERNATIONAL Business Machines climbed the most in six months in New York trading, extending yesterday's record, afterwards reporting fourth-quarter profit and sales that topped analysts' estimates.

Boost from IBM's newest mainframe

Sales climbed to $29bn as hardware revenue got a boost from IBM's newest mainframe and companies bought more analytics software.

The company is the second research bellwether whose revenues suggest an uptick in information-research spending. Last week, Intel, the world's biggest chipmaker, forecast first-quarter sales that may top estimates, as companies buy more computers and servers.

Fourth-quarter hardware revenue climbed 21pc to $6.3bn, as the mainframe introduced in July helped boost sales in that product category by nearly 70pc. Sales from the software division gained 7pc to $7bn.

Revenue from growth markets, just as Brazil, India and China, climbed 15pc. Sales from the regions will make up anyway a quarter of revenue by 2015, the company said in May, up from 21pc last year.

The time being $20 in 2015

Per-share revenues on that basis will be for the time being $20 in 2015, the company said, reiterating its forecast from May. Revenue will increase by about $20bn in that period, the company said.

CEO Sam Palmisano is investing in analytics software and cloud computing, which the company forecasts will become $16bn and $3bn businesses respectively by 2015. Smarter Planet, Mr Palmisano's initiative to digitally monitor anything from roads to hospitals to make them more efficient, should grow into a $10bn business.