IBM Q3 Profits Rise 14 Percent

IBM is reporting a 14 percent growth in year over year net income, posting a third-quarter profit of $3.2 billion, or $2.40 a share, on revenue of $23.6 billion. IBM has been shifting its focus towards software and services from hardware and it appears to be paying off. Chairman, president and CEO, Samuel Palmisano said in a statement that IBM’s “strategic shift to higher-value businesses” contributed to the growth and the company saw “improved revenue trends in business and share gains in software and hardware.”

IBM expects increased full-year 2009 earnings of at least $9.85 per share compared with its previous expectation of at least $9.70 per share. IBM CFO Mark Loughridge said in the earnings call that revenue was boosted by increased sales of software and services. He added that IBM gained share in software areas, specifically mentioning competitor Oracle.

IBM says the company is continuing to invest in R&D in cloud computing and business analytics, which seems to be the future for Big Blue. The company recently acquired data analytics company SPSS. Loughridge called specific attention to IBM’s reach in the health care space, particularly with regard to the electronic medical records. The services segment as a whole drove an eleven percent increase in pre-tax profits. IBM signed $6.7 billion in the outsourcing segment of the business.