IBM posted strong fourth-quarter revenue of $23.7 billion, exceeding analysts' performance predicitions. According to a poll conducted by First Call, analysts been expecting IBM to post revenue of $23.2 billion. Contributing to the increase was IBM's Global Services division, which posted revenue of $10.6 billion. IBM CEO Sam Palmisano credited the Global Services division growth to IBM's acquisition of PwC Consulting, a consulting and technology services company.
"In one of the most challenging years in business, we delivered a solid quarter and finished the year strong. We continued to gain share in our core businesses and managed our company very well in a tough environment. At year end, IBM's financial position was strong enough for us to take the important step of fully funding the U.S. pension plan."

Mr. Palmisano, who joined IBM last spring, has helped lead the company in the direction of "on demand" computing, a concept that is based on building larger, more reliable computer networks where companies purchase computing power as a service or a utility. IBM has reportedly allocated a $10 billion budget to grow this new area, known as the 'On-Demand' Group, in the areas of research and development and acquisitions.

As part of improving its profitability, IBM has reduced (and) the size of its work force, and will likely continue to pare it down. In 2002, IBM announced that it planned to eliminate jobs for about 5% of its 300,000 employees, or 15,613 employees.