IBM and Microsoft surprised shareholders last week with sales and profit figures that were better than the market had expected.
The hardware vendor saw its year-on-year profit rise 60 per cent to $2.4bn from $1.5bn for its second quarter. IBM's revenue was up 16 per cent to $21.91bn from $18.82bn. Both figures beat the most optimistic estimates from Wall Street analysts.
Sales of hardware rose 22 per cent to $9.4bn, services sales including maintenance surged 15 per cent to $8bn and software sales grew nine per cent to $3.1bn.
On the hardware front, IBM said sales of its AS/400 business computers had declined, but its other business in that sector - System 390, RS/6000 and PCs - all showed year-on-year improvement.
The vendor pointed out that software sales were strong, driven by the database, transaction processing and Tivoli products.
IBM showed worldwide growth. Sales in the Americas rose 16 per cent to $10bn; in EMEA, 14 per cent to $6.4bn; and in Asia-Pacific, 19 per cent to $3.6bn.
Microsoft's profit climbed 62 per cent to $2.20bn, up from $1.36bn this time last year for its fourth quarter.
Turnover climbed 39 per cent to $5.76bn from $4.15bn last year. The profit figure was more than 10 per cent better than Wall Street analysts predicted, but the software vendor has a reputation of guiding estimates lower.
For Microsoft, the arrival of Office 2000 and the increasing popularity of Windows NT, were among the key drivers behind its growth spurt.
The software giant would not reveal detailed sales figures for Office 2000, but its productivity software sector showed operating revenue of $2.93bn, up almost 48 per cent from last year's $2bn.
Microsoft claimed NT was installed on 37 million computers, which is more than twice as many machines as the previous year. It added that NT was being pre-installed on nearly one-in-three PCs shipped.
see Feature, page 29.
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