IBM beats expectations in fourth quarter | VailDaily.com
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IBM beats expectations in fourth quarter

BOSTON – A new line of mainframe computers and positive trends in the chip business boosted fourth-quarter results at International Business Machines Corp., whose profit rose 13 percent and beat Wall Street expectations Tuesday.The report also served as an update on the health of IBM’s services business, which accounts for half of Big Blue’s revenue. Some analysts had feared a shortfall in long-term services contracts signed in the fourth quarter, but the problem did not appear severe.In the last three months of 2005, IBM earned $3.19 billion, or $1.99 per share, on revenue of $24.4 billion. The results were pulled down 10 cents per share by a $267 million charge stemming from IBM’s recent decision to freeze its pension plan for U.S. workers in 2008, and by 2 cents per share because of an accounting change.The consensus of analysts surveyed by Thomson Financial was for earnings of $1.94 per share on revenue of $25.5 billion.In the same period of 2004, IBM registered a net profit of $2.83 billion, or $1.67 per share, with revenue of $27.7 billion. However, subtracting the performance of IBM’s personal computer division, which was later sold to China’s Lenovo Group Ltd., IBM’s results would have been $2.77 billion, or $1.64 per share, on $24.7 billion in revenue.Armonk, N.Y.-based IBM did not immediately address Wall Street’s current estimates for 2006 of $5.66 per share and revenue of $93.4 billion.IBM shares fell 17 cents to close at $83 on the New York Stock Exchange before the earnings report was released.Vail, Colorado


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