IBM gave skittish Wall Street investors reason to cheer with its prerelease of fourth quarter earnings data that exceeded analysts’ expectations. The high-tech industry bellwether said it racked up $28.9 billion in fourth-quarter revenue, a 10 percent year-over-year increase from the prior year. Even better, EPS (earnings per share) grew by 24 percent to $2.80.
For full year 2007, IBM said earnings rose 18 percent to $7.18 per share on $98.8 billion in revenue. However, the upbeat announcement was tempered by CEO Samuel Palmisano’s explanation that the outstanding results were primarily driven by “the broad scope of IBM’s global business — led by strong operational performance in Asia, Europe and emerging countries.”
“IBM is well positioned as we begin 2008 as a result of our global business reach, solid recurring revenue stream and strong financial position,” Palmisano said in a statement.
IBM’s Buying Spree
IBM’s huge pile of cash on hand, which amounted to $16 billion at the end of last year, will enable the company to continue its strategy of buying the applications and related services it needs to fill holes in its own software portfolio. For example, IBM closed out 2007 by announcing its acquisition of Solid Information Technology and Solid’s impressive in-memory database software, and then rang in the New Year by announcing its deal for privately held storage technology company XIV.
IBM said it was particularly impressed by XIV’s Nextra architecture, which features the capability to scale dynamically, heal itself in the event of failure, and self-tune for optimum performance. The technology is a good fit for enabling Big Blue to deliver technologies and solutions at every layer of the datacenter, including storage, servers, software and services, said General Manager of IBM System Storage Andy Monshaw.
“The ability for almost anyone to create digital content at any time has…