IBM posts higher Q4 profits on lower Q4 revenue

Armonk (NY) - In his fourth-quarter 2005 report to investors, IBM chief financial officer Mark Loughridge told investors that his company’s gross profit increased 5.3 points, to 44.1% of revenue. However, revenue dropped that quarter 12% over the fourth quarter of 2004, to $24.4 billion. For the year, revenue fell 5% over 2004, to $91.1 billion.

Loughridge credited the sale of IBM’s PC division to Lenovo for saving these numbers from being worse than they are. However, he said, retirement plans delivered the biggest blow to his company, he said. How IBM reported its options outlay to employees became the subject of a Securities and Exchange Commission investigation, it was reported last Thursday. Loughridge has yet to mention the SEC investigation, nearly 20 minutes into his report. However, he did state the relative strength of the US dollar overseas also has a negative impact on IBM revenue worldwide.

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