IBM continued its recovery from a weak start to the year as it reported a bounce in earnings thanks to cost-cutting in its large services division, particularly in Europe.
Adjusted for the disposal of its PC business, which was sold to Lenovo of China earlier this year, Big Blue said that its revenues had crept up by 4 per cent to $21.5bn.
The re-structuring of IBM's services division, which now accounts for 54% of total group revenues, has helped reduce costs, increase margins and increase earnings per share. Solid growth in services bookings is also helping.
Germany and Italy remain weak, reflecting their sluggish economies. IBM is confident that its improved performance can continue into the last quarter of 2005.