IBM hits targets

IBM hit targets for both profit and turnover for the second quarter of 2001. The computing giant made a profit of $2bn, up from $1.9bn. Turnover is down very slightly from $21.65bn for the corresponding quarter last year to $21.6bn.

IBM chairman Lou Gerstner said in a statement that he was particularly pleased with the results in light of "extremely difficult market conditions".

Gerstner credited the success to increased revenue from services. IBM services revenue was up 15 per cent and brought in $16bn in new business during the quarter. Hardware and software revenues were both down five per cent compared to the corresponding quarter last year.

Looking forward Gerstner said the ongoing weakness in the PC and disk drive market was likely to continue throughout the second half of the year. Microelectronics is also being hit as OEMs demand dwindles.

Gerstner also claimed the industry is in the midst of a major turnaround and is not simply feeling the effects of recession.

Gerstner said: "The short-term, cyclical problems of the industry are totally unrelated to the fundamental shift in customer buying behaviour that foretells an industry driven by services, built on an infrastructure dominated by powerful, secure servers, with application integration provided by middleware software. We believe we are uniquely positioned to lead in this new environment, regardless of economic conditions."