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Tuesday, October 17, 2006

IBM Up 3%; Signals a $109 Billion in Backlog

IBM (IBM) posted $1.45 EPS, $0.10 above $1.35 estimates; and revenues of $22.6 Billion instead of $22.1 Billion.

From a geographic perspective, the Americas third-quarter revenues were $9.8 billion, an increase of 3 percent as reported (2 percent, adjusting for currency) from the 2005 period. Revenues from Europe/Middle East/Africa were $7.3 billion, up 6 percent (2 percent, adjusting for currency). Asia-Pacific revenues increased 4 percent (6 percent, adjusting for currency) to $4.5 billion. OEM revenues were $1.0 billion, up 24 percent compared with the 2005 third quarter. Revenues from Software were $4.4 billion, an increase of 9 percent (7 percent, adjusting for currency) compared with the third quarter of 2005. Revenues from IBM's middleware brands, which include WebSphere, Information Management, Tivoli, Lotus and Rational products, were $3.4 billion, up 12 percent versus the third quarter of 2005. Operating System revenues were down 6%. Services came in at the high-end of estimates.

The company's total gross profit margin was 42.0 percent in the 2006 third quarter compared with 40.6 percent in the 2005 period. IBM's effective tax rate in the third-quarter 2006 was 30.0 percent, mainly different on foreign income repatriations.

Its BACKLOG of all orders still in the pipeline was put at $109 BILLION.

Shares are up 3% at $89.56 in after-hours trading.IB

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