Wall Street seemed genuinely impressed with IBM's performance. Reuters noted that IBM's revenues and earnings both exceeded Wall Street's expectations. CEO Ginni Rometty mentioned the most important stats of all: "We achieved record profit, earnings per share and free cash flow in 2012."
Meanwhile, HP has been retrenching after writing off major portions of its Autonomy and EDS acquisitions. HP CEO Meg Whitman has stated that a company turnaround will require a multi-year journey. Elsewhere, Dell is thinking about going private, and Intel is still working overtime to gain mind share and market share in the market for tablet and smartphone processors.
Not that life is perfect at IBM. Global Technology Services segment revenues decreased 2 percent (flat adjusting for currency) to $10.3 billion in Q4, the latest indication that customers are watching every dollar as they consider long- and short-term outsourcing and consulting engagements. Despite the challenging market, IBM still has a services backlog of about $140 billion as of December 31, 2012.
IBM Software: Winning DealsSoftware also had a good showing, where Q4 revenues rose 3 percent to $7.9 billion. Revenue from middleware and WebSphere software rose 5 percent and 11 percent, respectively, during Q4. That's impressive, considering both product portfolios typically involve big-ticket customer purchases that require careful consideration.
Oh, and how about this twist: IBM's hardware business (systems and technology) was $5.8 billion for the quarter -- down only about 1 percent. That figure shows IBM's high-end server business is holding up far better than the commodity PC industry, where Q4 sales fell according to IDC and Gartner.