The highlight was the software business and chips - largely for games consoles (including the soon to be launched Playstation 3).
Among its divisions, revenues from global services fell 1.2% to $11.6bn, while the disposal of the PC business led to a decline in hardware sales of 32.3%. Software revenues grew by 2.4%, or 6% adjusted for currency fluctuations, thanks to strong sales of middleware.
Net income rose 22% to $1.7bn, while earnings per share were up 27% to $1.08, compared to Wall Street expectations of $1.04.Allowing for the fact that Wall Street had low expectations of IBM given their awful performance at the start of last year, these results are at least solid. IBM seems to be on a path to recovery - albeit an extremely unexciting one.
I can't help feeling that they have to keep improving the software, hardware and chip divisions. They cannot rely on services alone - they just won't get the growth or margins over the long term.