IBM: Profit Expected to Double by 2015

IBM is aiming high – double as high, that is, when it comes to expectations. The computing stalwart told investors and media that it expects its profit to nearly double to more than $20 a share by 2015.

IBM CEO Sam Palmisano told an annual investor briefing on Wednesday that the company expects earnings per share excluding items of “at least $20” for 2015. Though Palmisano also said IBM would likely undergo another major transformation over the next five years, the company credits its push into profitable technology services and software businesses. At the briefing, IBM also stressed its forecast for EPS of at least $11.20 for 2010.

The outlook, said CNBC, is part of IBM’s long-term road map given in 2007. That’s when the company targeted EPS of about $10-11 by 2010. The company reported EPS of $10.01 a share for 2009.

“We are going to take our current model and evolve it,” said Palmisano. “It is an extension of all the hard work we have done.”

The Wall Street Journal noted that “under his predecessor, Louis V. Gerstner, IBM transformed itself from a hardware maker into a services juggernaut. Now under Mr. Palmisano, IBM is turning itself into more of a software-driven company.”

Additionally, “the company has been investing heavily in analytics and infrastructure software that helps companies and governments to run and improve their operations.” By 2015, IBM said it expects software to account for at least 50 percent of its pre-tax operating income, up from 42 percent in 2009.

One major factor that will push IBM to the next level is its strategy with overseas markets, including Brazil, China, India and Russia, the Journal reported.