By
Anders Bylund
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July 18, 2008
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It's the same story from IBM (NYSE: IBM ) , but it never really gets old.
In the face of a possible American recession, Big Blue delivered 28% earnings growth on 13% higher revenue, based on balanced performance across the globe in various product categories, with a healthy mix of supporting services. $26.8 billion in sales is nothing to sneeze at, nor is $1.98 of earnings per share for an earnings yield of 6.3% at the current run rate. Good luck finding a savings account with that kind of return on your invested capital.
Oracle (Nasdaq: ORCL ) would be very satisfied with a 28% year-over-year earnings improvement, and Larry Ellison is probably gritting his teeth right now at his biggest rival's success. The same goes for German enterprise software competitor SAP AG (NYSE: SAP ) or even domestic nemesis Microsoft (Nasdaq: MSFT ) -- any of these guys would take IBM's numbers over their own at the moment.
And it looks like the success story will continue. "We entered the second quarter with a strong deal pipeline and this quarter, frankly, we were sold out," said CFO Mark Loughridge. Large contracts with pharma giant Pfizer (NYSE: PFE ) and office equipment biggie Ricoh (OTC BB: RICOY) helped Big Blue saturate its order capacity, and the next quarter should be just as impressive as this one.
One of the biggest tech businesses in the world has completely filled its order book? Now that’s a nice problem to have. Keep looking for trouble, IBM.
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