Reuters IBM profit gains on services Tuesday January 17, 4:12 pm ET
SAN FRANCISCO (Reuters) - IBM (NYSE:IBM - News), the world's biggest computer company, said on Tuesday that quarterly profit rose, helped by its consulting business and sales of large computers to businesses. ADVERTISEMENT Net income climbed to $3.19 billion, or $1.99 per share, in the fourth quarter from a restated $2.83 billion, or $1.67 per share, a year earlier, International Business Machines Corp. of Armonk, New York said. Revenue fell after IBM sold its personal computer business in May to China's Lenovo Group Ltd. and a strengthening dollar hurt revenue outside the U.S.
IBM reported fourth quarter earnings before exceptional items of $2.11 per share, surpassing analysts' average forecast of $1.94 per share as compiled by Reuters Estimates.
IBM, led by Chief Executive Samuel Palmisano, was helped by the first full quarter's sales of its updated mainframe computers used by companies to process large volumes of data. Revenue from computer services, which account for more than 50 percent of IBM's revenue, also boosted results.
IBM also benefited from rising global demand for server computers used by businesses, where IBM is the market leader. IBM stock trades at 14.9 times 2006 estimated earnings, compared with a multiple of 17.2 for Hewlett-Packard Co. (NYSE:HPQ - News), the world's No. 2 personal computer maker, and 20.3 for Dell Inc. (NasdaqNM:DELL - News), the largest personal computer manufacturer.
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