UK 'challenging' for IBM despite profit rise

EMEA sales slow as Big Blue posts overall rise in software and hardware sales

IBM's EMEA sales continue to fall despite the firm beating Wall Street expectations in its fiscal fourth quarter and full-year results.

Big Blue pleasantly surprised the market by posting a 10 per cent rise in net profit to $6.1bn (£3.8bn) for the three months to 31 December.

Sales for the quarter dipped by one per cent year on year to $29.05bn, with software sales up three per cent, services down two per cent and systems and technology revenue down one per cent.

Despite fears over the ‘fiscal cliff' crisis in Q4, sales from the Americas were flat at $12.5bn, while Asia-Pacific revenue rose four per cent to $7bn.

EMEA sales hit $9.1bn, a fall of five per cent on an annual comparison, or three per cent adjusting for currency effects, which chief financial officer Mark Loughridge attributed to the macroeconomic climate.

"It was challenging this quarter in the UK and Germany, though we did see an improvement in Italy," Loughridge said on IBM's Q4 earnings call, a transcript of which can be found here.

IBM chief executive Ginni Rometty (pictured) said Big Blue achieved record profit in 2012.

"Our performance in the fourth quarter and for the full year was driven by our strategic growth initiatives – growth markets, analytics, cloud computing, Smarter Planet solutions – which support our continued shift to higher-value businesses," she said.

On the software side, IBM said sales of its key middleware products – including WebSphere, Information Management, Tivoli, Lotus and Rational – rose five per cent to $5.5bn. Operating system revenue was flat at $709m.

IBM's hardware business actually grew four per cent, stripping out the recent divestment of its Retail Store Solutions (RSS).

Revenue from System z mainframe server products rose 56 per cent. Power Systems fell 19 per cent, System x was down two per cent, while System Storage decreased five per cent.