Armonk (NY) - At close of business yesterday, IBM announced Q4 2008 earnings. For the full 2008 fiscal year, they reported record revenues of $103.6 billion, record pre-tax profits of $16.7 billion and a record earnings per share of $8.93. For 2009, IBM expects to do even better, up 3% at least $9.20.





IBM's 4Q08 revenues were $27.0 billion, which is 6% less than 4Q'2007. IBM indicates that, adjusting for inflation and currency variances, it is a decrease of 1%.



America's operations were $11.5 billion, down 2% compared to the same period in 2007. Europe/Middle East/Africa were $9.5 billion, down 12%. Asia-Pacific revenues decreased 1% to $5.5 billion. OEM revenues were $615 million, which is down 31% year on year. Revenues from the company's "growth markets" decreased 7% and represented 18% of geographic revenues.



Software revenues were $6.4 billion, an increase of 3% compared to Q4 2007. Middleware products (primarily WeSphere, Information Management, Tivoli, Lotus and Rational) were $5.2 billion, up 4% from Q4 2007. OS revenues included $622 million, down 6% year on year.



Systems and Technology segment included $5.4 billion, which is down 20% year on year. Systems revenue overall decreased 18%, while System p server products increased 8%. Global Financing segments decreased 1% to $660 million.



IBM's tax rate was 23.8% compared with 28% in Q4'2007, a decline of 4.2 points due to tax credits and retroactive benefits recently enacted in the U.S. research tax credit area. The full 2008 tax rate was 26.2%, and IBM expects 2009 tax rate to be 26.5%.



IBM number of outstanding common shares in Q4'2008 was 1.35 billion, compared to 1.41 billion in Q4'2007. From IBM's website:

Full-Year 2008 Results

o Diluted earnings of $8.93 per share, up 24 percent as reported;
o Total revenues of $103.6 billion, up 5 percent, 2 percent adjusting for currency;
o Global Technology Services revenues up 9 percent, 6 percent adjusting for currency; pre-tax income up 30 percent;
o Global Business Services revenues up 9 percent, 5 percent adjusting for currency; pre-tax income up 30 percent;
o Software revenues up 11 percent, 8 percent adjusting for currency; pre-tax income up 18 percent.

Income from continuing operations for the year ended December 31, 2008 was $12.3 billion compared with $10.4 billion in the year-ago period, an increase of 18 percent. Diluted earnings were $8.93 per share compared with $7.18 per diluted share in 2007, an increase of 24 percent. Revenues from continuing operations for 2008 totaled $103.6 billion, an increase of 5 percent (2 percent, adjusting for currency), compared with $98.8 billion in 2007.