Computer giant IBM Corp. has raised its annual forecast for this year as the technology sector batted for bigger sales in the coming months.
The company made the announcement despite shaky market conditions in the technology sector, saying that the worst is finally over for the sector and bigger sales will be at hand in the comings months.
IBM also reported that its net income for the second quarter of this year has spiked up by nine percent ($3.39) billion, or roughly $2.65 per share. The figures have topped earlier analysts’ projection of $2.58 per share.
But the company said that its Q2 revenue has slipped by two percent to $23.7 billion, below the $24.2 billion analysts predicted.
The computer giant blamed the currency changes over the past three months, which cost at least $500 million worth of losses to the company. IBM said that experts, who have estimated the revenue projection, have failed to include the data in their calculations.
The currency value is important for IBM since most of its businesses were outside the United States, particularly Europe.
With the dollar-euro rate at its lowest, the computer giant gained less possible revenue when the euros were converted to greenbacks.
Also, despite the consistent positive forecasting by Wall Street, IBM also disclosed that the company shares dropped by four percent on Monday due to reductions in its services contract value.
IBM announced a 12 percent slip in the value of services contracts signed during the second quarter of 2010, costing to about $12.3 billion.
Meanwhile, other major players in the technology sector expressed belief that the economy will soon pick and more corporations will start to replace their old computer systems, which in turn could bring higher revenue for the tech firms.
Other Internet companies such as Google also shared the same view, citing the continued increase in the advertising revenue online.
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