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Yesterday, IBM reported Q4 2008 earnings of $3.28 per fully diluted share, 17% ahead of Q4 2007 and generally ahead of analysts' expectations. On a currency adjusted basis, the Company reported $27.0 billion in sales, a 1% decline from Q4 2007. Software sales grew by 9% on a currency adjusted basis, technology services up 3% and and business services were reported as flat.

For the full year, IBM reported record sales of $103.6 billion, record pre-tax income of $16.7 billion and free cashflow of $14.3 billion (excluding Global Financing receivables). Earnings were reported at $8.93 per share for the full year.

Not a bad year.

The Company is guiding for a minimum of $9.20 in EPS for 2009, which is a 3% forecasted increase. With its expansive international footprint and the potential to benefit from President Obama's "digital infrastructure" stimulus package, one could anticipate that IBM could potentially beat that minimum. This should be considered a rosy outlook considering the world economic situation for 2009. With $12.9 billion in cash, it has the ability to continue to make strategic acquisitions in software and infrastructure during 2009 while the shares of strategic targets may be depressed.

IBM has been transforming itself for over a decade now into the preeminent technology services company in the world. With little fanfare. While Google (NASDAQ:GOOG) and Microsoft (NASDAQ:MSFT) capture the imaginations and mindshare of the public, IBM has been performing.

With respect to performance, there is greater chance than not that Google could beat analysts' expectations when it reports later this week. During economic recessions, marketers look for measurability for their reduced budgets. Google's CPC model and its dominance are likely to attract more dollars than expected because budgets tend to flow to "safety" during bad economic periods. Google is generally perceived to be a safe spot for marketers because of the reach and measurability of its offerings.

Disclosure: I do not own any shares of the Companies discussed above.

Source: IBM Beats Analyst Expectations Yet Again

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