IBM Q4 Results Raise Questions about U.S. IT Spending

IBM Monday credited overseas growth and favorable currency-exchange rates for a preliminary fourth-quarter earnings report that was strong enough to help lift the stock market as a whole. But Samuel Palmisano, IBM's chairman, president and CEO, didn't say anything about the state of the U.S. IT market.

In its announcement, IBM said that it would post US$28.9 billion in revenue for last year's fourth quarter, a 10 percent increase from the same period in 2006. The company said its fourth-quarter earnings would amount to $2.80 per share, up 24 percent year to year. Both the revenue and profit figures are above analyst expectations.

Forrester Research Inc. last month lowered its forecast growth in IT capital-equipment spending in the U.S. for 2008 to 4.8 percent, which is three percentage points below an earlier prediction that the consulting firm published in September. Forrester also lowered its growth forecast for spending on IT operations in the U.S., from 6.4 percent to 5.2 percent.