IBM Australia profits stumble

Total revenue for IBM's Australian subsidiary down 1.6%

IBM Australia has had another major decline in profit, down 58% to A$54.8 million. In 2005, net income dropped from A$161.85 million to A$130 million.

IBM New Zealand is a month away from reporting its annual results, a spokesperson says.

IBM Australia's profit decline was accompanied by drops in hardware and financing revenue, and the outsourcing giant managed only a slight rise in services sales during the 12 months to December 31 last year.

Total revenue for IBM's Australian subsidiary was down 1.6% to A$3.4 billion, according to accounts filed with the Australian Securities and Investments Commission.

Revenue from hardware and financing fell but software sales were up from $340.26 million in the previous corresponding period to $393.4 million.

Hardware sales dropped from $680.3 million a year ago to $544.97 million, and financing revenue was down 5% to $314.8 million. Services revenue was up 0.5% to $2.42 billion.

The miniscule rise in services revenue was well below local market growth forecasts by Gartner Dataquest, which has tipped a 4.8% compound annual growth rate for the Australian technology services industry between 2006 and 2010.

By comparison, Accenture reported a 16.5% rise in revenue during the 12 months to August 31 last year.

In published reports last year IBM attributed declines in 2005 income and revenue to a rebalancing of its business.

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