IBM, Apple results ahead of expectations

Computer giants IBM and Apple caught the party mood on Wall Street last night with results ahead of expectations and cautiously upbeat assessments on future prospects.

IBM recorded a 15 per cent jump in first-quarter profit to $1.75 billion (€2 billion) or 98 US cents per share, compared with $1.52 billion or 83 US cents per share. The results were in line with forecasts. Second-quarter figures from Apple, which employs about 1,000 people in Cork, were even more buoyant. Apple said it earned $40 million or 11 US cents per diluted share excluding non-recurring items. Wall Street forecasts had ranged from an eight-cent loss to a seven-cent profit, with an average of a one US cent gain.

Apple now expects to generate $3.2 billion to $3.4 billion in revenue in the second half of the fiscal year, and said "we are targeting sequential improvements in both revenues and profits in the June and September quarters". IBM, which employs close to 4,500 people in Dublin, said it expected to outperform its rivals but was not immune to customer spending cutbacks.

"The momentum we saw building in the latter part of 2000 continued in the first quarter of 2001," chairman and chief executive Mr Louis Gerstner said in a statement. "Looking forward, we are no better than others in predicting how the current economic uncertainty will unfold. IBM is certainly not immune to broad cutbacks in customer spending. However, based on recent results, we expect we will outperform most of our competitors in whatever market emerges this year."

The news should bolster markets already rising on the back of an upbeat outlook from chip giant Intel and the Federal Reserve's surprise half-point cut in rates yesterday.

Mr Gerstner said the bad news in the quarter was in the desktop personal computer business, which was in the midst of a slowdown. The desktop segment was hurting, he said, adding it was not just a cyclical, or temporary, problem. Other companies reporting last night included sales and customer service software maker Siebel Systems whose first-quarter results beat Wall Street expectations as revenue climbed 84 per cent despite tough US trading conditions.

The company, which employs 80 people in Dublin and had been widely predicted to slash jobs, said net income was $76.9 million, or 15 US cents per share, compared with pro-forma net income of $35.3 million, or seven US cents, a year ago.

Analysts, who have been lowering estimates in response to the softening US economy, had expected the company to earn 14 US cents.