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| Cost-cutters boost IBM's results | Cost-cutters boost IBM's results |
| (30 minutes later) | |
| IBM's profits have come in better than expected, helped by cash-strapped companies calling it in to help cut costs and improve IT infrastructure. | IBM's profits have come in better than expected, helped by cash-strapped companies calling it in to help cut costs and improve IT infrastructure. |
| Net profit for the three months to the end of June came in at $2.77bn, which is up 22% on the same period of 2007. | Net profit for the three months to the end of June came in at $2.77bn, which is up 22% on the same period of 2007. |
| IBM also raised its own forecast for earnings for the whole of 2008. | IBM also raised its own forecast for earnings for the whole of 2008. |
| The company has also benefited from the weakness of the US dollar, as it means that its earnings from outside the US are more valuable. | The company has also benefited from the weakness of the US dollar, as it means that its earnings from outside the US are more valuable. |
| The company's sales jumped 13% in the three month period, but the increase would only have been 6% without the effect of the weaker dollar. | |
| Safe haven | |
| About two-thirds of IBM's revenue comes from non-US sources. | About two-thirds of IBM's revenue comes from non-US sources. |
| "They're focusing outside the US to ride through the domestic downturn," said Zach Rosenstock from Wayne Hummer Wealth Management. | "They're focusing outside the US to ride through the domestic downturn," said Zach Rosenstock from Wayne Hummer Wealth Management. |
| Many investors see IBM as a safe haven against the US economic slowdown. Its shares have risen about 17% this year, compared with a 15% fall on the Dow Jones Industrial Average. | |
| IBM said it was still concerned about the economies of some of the biggest industrialised nations, but added that its concerns were already factored into its forecasts. | |
| New service contracts, which are a key indicator of future growth, grew 12% to $14.7bn in the quarter. | |
| IBM's results impressed Wall Street much more than Google's and Microsoft's figures, which came out at the same time and were below expectations. |