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IBM beats recession blues

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IBM has announced third-quarter 2008 diluted earnings of $2.05 per share from continuing operations, an increase of 22%, compared with diluted earnings of $1.68 per share in the third quarter of 2007.

The company also reported net income of $2.8-billion, an increase of 20%. Revenue increased 5%, including three points of currency benefit, to $25,3-billion, compared with the third quarter of 2008.
IBM said it continues to expect full-year 2008 earnings per share of at least $8.75, or year-to-year growth of 22%.
The company's gross profit margin in the third quarter was 43.3 % compared with 41.3% in the third quarter of 2007. Pre-tax income was $3.9-billion, an increase of 19% compared with the third quarter of 2007.
At the end of the third quarter, IBM's year-to-date free cash flow was approximately $6.4-billion and its cash balance was $9.8-billion.
"Our results demonstrate that the combination of a steady base of recurring revenue and profits, investments for growth in emerging markets, a range of products and services that deliver value to clients, and a strong and flexible financial foundation give IBM a competitive edge in good times and tough times," says Samuel Palmisano, IBM chairman, president and CEO. "We remain confident in our full-year outlook."
The company also reaffirmed its full-year earnings guidance, a strong sign that IBM's core businesses are holding up well despite the deteriorating US economy.