IBM's first quarter profits fall; sales miss estimates
Net income was reported at $2.3 billion, or $1.70 a share, which at least was better than the $1.66 expected by analysts. Computer and software sales fell in the quarter for IBM, which could pressure the company to make acquisitions.
IBM didn't pursue its $7 billion bid to buy Sun Microsystems to add to its server business, after Sun rejected the offer earlier this month. Instead, today, Oracle agreed to buy Sun for $7.4 billion.
The economic recession forced businesses to slash budgets and IBM saw computer sales fall 23 percent in the last quarter, Bloomberg News reported. The drop may add to pressure for Chief Executive Officer Sam Palmisano to buy companies in order to help fuel growth. "Everybody's struggling with their hardware, but IBM seems to be faring worse," Keith Bachman, an analyst at BMO Capital Markets Corp. in New York, told Bloomberg.
"We are well-positioned to continue to move aggressively and leverage our strong cash performance to make the most of the opportunities that arise," Palmisano said in the statement. "We remain ahead of pace for our 2010 roadmap of $10 to $11 per share."
IBM said that it expects 2009 profit of at least $9.20 per share.