A ray of light for the tech sector

While other technology firms have fared less well, technology services firm IBM brings light to the sector with a 12 percent increase on its latest quarterly profits and a rosy forecast for 2009.┬á  IBM boss Samuel Palmisano said it had been an "outstanding year," with IMBÔÇÖs net profit in the fourth quarter reaching 4.4 billion and a profit margin of 47.9 percent, up three percentage points from a year earlier.┬á The news boosted IBM's share price 4.5 percent to $85.64 in after-hours trading in New York. While Intel reported a sharp 90 percent profit drop in the final quarter of 2008, and Bloomberg speculated that it could possibly report its first loss for more than two decades in the current quarter, many investors see IBM shares as a safe haven from the US downturn.┬á IBM said it expected to earn $9.20 per share in 2009 - significantly more than analysts had expected. ┬á "To be honest, I didn't believe they could show something like this - I think the results they posted were stellar," said Peter Misek, an analyst with Canaccord Adams. "They just executed really well - really, really, really well." ┬á The firm has been able to cut its costs sharply, and believes it can benefit as cash-strapped companies seek its help to cut their own costs and improve IT infrastructure. ┬á "A strong fourth quarter capped an outstanding year. In 2008 IBM performed well in an extremely difficult economic environment. Clearly our strategic transformation --- migrating to the more profitable segments of the industry, investing in growth regions of the world, and driving productivity through global integration --- is continuing to pay dividends," said Palmisano.┬á "With our strong financial position, solid recurring revenue and profit streams and global reach, we are confident about 2009 and, based on our 2008 performance, we are ahead of pace on our roadmap for $10 to $11 per share."