In a busy day in the American technology sector yesterday computer business IBM surged ahead of market expectations, while software maker Microsoft and internet firm Google failed to beat forecasts.
IBM said its second-quarter profit leaped 22 per cent to $2.8bn (£1.4bn). It soared past Wall Street’s estimates as its core services division continued to thrive despite the economic downturn in America.
The New York-based company said its sales for the period jumped nearly 13 per cent to $26.8bn, about $900m more than analysts were expecting. IBM gets about two-thirds of its sales from outside the United States. Recurring revenue from services and software contracts accounts for about half its business, providing a buffer from sharp turns in the economy.
Due to that stability, many investors view IBM shares as a safe haven in tough economic times. The stock has risen about 17 per cent this year, compared with a 15 per cent decline in the Dow Jones Industrial index.
Microsoft posted a 42 per cent rise in fourth quarter profit to $4.3bn below expectations, boosted by a steady increase of personal computer sales in emerging markets and demand for new computer server software.
Sales at Microsoft, which is locked in an on-again, off-again pursuit of internet giant Yahoo, rose 18 per cent to $15.8bn.
The software maker was aided by strong demand for Windows 2008, the flagship software at its server and tools division.
Finally, Google’s second-quarter profit rose 35 per cent from a year ago to $1.3bn, falling short of many analysts’ estimates and sparking concern about the online advertising giant’s performance amid the economic slowdown.