UPDATE - IBM CEO says technology spending improving
Wednesday May 19, 11:42 am ET
(Recasts lead with IBM's company outlook, adds comments on spending)
NEW YORK, May 19 (Reuters) - The chief executive of International Business Machines Corp. (NYSE:IBM - News) on Wednesday said spending on technology is improving and that IBM expects to grow more quickly than the overall market as it taps into new markets.
Chief Executive Officer Samuel Palmisano said that traditional information technology areas such as personal computers, computer servers and data storage will return to historical growth levels of twice the rate of gross domestic product.
"That probably comes out to mid-single digits over time," Palmisano said in a meeting with analysts that was Webcast.
Palmisano said that Armonk, New York-based IBM expects to grow more quickly than the broad market as it taps into new markets such as managed services in areas like human resources, known as business process transformation.
"In this environment where things are growing, we're optimistic that IBM will take advantages of those circumstances and will continue to outperform our competition," he said.
Shares of IBM rose $2.35, or 2.7 percent, to $88.41 in late morning trade on the New York Stock Exchange (News - Websites) .
IBM, the world's largest computer company, has business around the world and is seen as a proxy for demand in the sector, which is emerging from a downturn in spending brought on by the poor economy.
The American Stock Exchange Computer Hardware Index (AMEX:^HWI - News) was up 1.8 percent.
"The economy is getting better. Capital spending is up," Palmisano said during the call.
His comments echo those in recent weeks from the heads of other large technology companies such as Dell Inc. (NasdaqNM:DELL - News) and Hewlett-Packard Co. (NYSE:HPQ - News). |
