IBM's Louis Gerstner Jr, chairman and chief executive announced that their last quarter was solid with earnings per share up 20% and that they had experienced an acceleration of revenue growth relative to the first half of the year.

They would have liked to have seen more revenue growth but felt that there were three factors that held them back and they were:

• demand for microelectronic products, both from customers and internal IBM customers outstripped ability to supply components,
  
• the upcoming release of new high-end server slowed demand for the System/390 family of servers,
  
• parts of their software business slowed unexpectedly in September, but no reasons were given for this.

Gerstner also stated that the PC business had rebounded, especially for server and ThinkPad products. He also expects that their broad portfolio will be even more important as they go forward, especially when compared with single-segment companies in their industry.

The company's overall gross profit margin of 35.8% in the their quarter was the same as in the third quarter of last year (or 36.4% excluding the 1999 actions).

Third-quarter expenses were £5bn and the expense-to-revenue ratio was 22.9% compared to 23.3% in the year earlier period (or 24.9% excluding the 1999 actions). IBM's tax rate in the third quarter was 30% compared with 33% in the third quarter of last year (or 30% excluding the 1999 actions).

Net income for the nine months ended September 30, 2000 was $5.4bn, or $2.97 per diluted common share compared with net incode of $5.6bn, or $2.99 per diluted common share, in the year-earlier period (or net income of $4.9bn, or $2.59 per diluted share, in 1999 after excluding the after-tax net benefit from the sale of the Global Network and other 1999 actions).

Revenues for the nine mpnths ended September 30, 2000 were $62.8bn, a decrease of 1% (up 1% at constant currency) compared with $63.4bn for the nine months of 1999.

Results IBM state reflect the changes that the company made in the organisation of its business segments, including the transfer of the syste-level product businesses from the technology segment to the enterprise systems segment and the transfer of point-of-sale products from the enterprise investments segment to the personal system segment.

Other changes were reflected in the areas where IBM made in its expense allocation methodology, allocating expense items previously unallocated and enhancing shared expense allocation.