IBM bucks gloom with rosy outlook

IBM believes it can benefit as cash-strapped companies seek its help to cut costs and improve IT infrastructure.

The firm has also been able to cut its own costs sharply.

IBM's net profit in the fourth quarter rose 12% from a year earlier to $4.4bn. IBM boss Samuel Palmisano said it had been an "outstanding year".

IBM said it expected to earn $9.20 per share in 2009 - significantly more than analysts had expected.

"To be honest, I didn't believe they could show something like this - I think the results they posted were stellar," said Peter Misek, an analyst with Canaccord Adams.

"They just executed really well - really, really, really well."

IBM's profit margin was 47.9%, up three percentage points from a year earlier.

The news boosted IBM's share price. In after-hours trading in New York, it climbed 4.5% to $85.64.

Other technology firms have fared less well.

Intel reported a sharp 90% profit drop in the final quarter of 2008, while Bloomberg said it could report its first loss for more than two decades in the current quarter.

Pound at lowest level since 1985

Sterling's slide has continued, with the pound touching $1.3622, as concerns about the UK economy and the banking sector intensified.

Sterling fell to its weakest level against the dollar since September 1985, before rising to $1.4015.

The pound remains weak against the euro, with the single currency now worth more than 93.3 pence.

Shares in Barclays took a further hit on Wednesday, sliding more than 9% in London trade.

But HSBC and Lloyds Banking Group finished ahead, up 30.5p to 515.5p, and 0.3p to 45.1p, respectively. And RBS shares were ahead by 21%, or 2.2p, at 12.5p.

Pound at 1985 levels against the dollar

However concern remains about the health of the global banking system.

Pounding

Last summer the pound was trading at more than $2.

The pound's slide this week followed RBS signalling it would make a record loss in 2008 and further government measures to encourage UK banks to lend.

"Fresh concerns about the key banking sector have fed through into broader concerns about the outlook for the economy," said Simon Derrick, a currency strategist at Bank of New York Mellon.

Economic data released on Wednesday exacerbated these fears.

UK mortgage lending fell by 30% in 2008 to the lowest level since 2002, while unemployment rose by 131,000 to 1.92 million between September and November.

Sony sees first loss in 14 years

Electronics giant Sony has said it is going make its first annual loss in 14 years as the global economic slowdown hits demand for its products.

For the financial year ending in March, Sony said it expected to make a net loss of 150bn yen ($1.7bn, £1.2bn).

The company also blamed a strong yen for making its exports more expensive.

Sony had forecast as recently as October that it would make a profit this year. The expected loss was much bigger than analysts had anticipated.

Last year, Sony made a profit of 369.4bn yen, but its fortunes have changed as the global downturn has hit home.

In October, it cut its profit forecast in half and shortly after announced it would lay off 8,000 employees and shut some manufacturing plants.

Sony is particularly sensitive to currency fluctuations since about 80% of its sales come from overseas.

The yen is at a 13-and-a-half-year high against the dollar, which has eroded Sony's foreign earnings.

Apple posts best quarterly profit

Apple has posted strong quarterly results that beat analysts' expectations and proved the company's resilience to the economic downturn.

The technology giant made a record net profit of $1.61bn (£1.15bn) and posted record revenue of $10.7bn for the quarter to the end of December.

Apple sold more than 22 million iPods and more than four million iPhones.

But the company warned that revenue could fall significantly in the first three months of 2009.

For the same quarter the previous year, Apple's profit was $1.58bn and its revenue was $9.6bn.

"Even in these economically challenging times, we are incredibly pleased to report our best quarterly revenue and earnings in Apple history - surpassing the $10bn in quarterly revenue for the first time ever," said Apple boss Steve Jobs.

Increased sales

The company saw sales increase right across its main product ranges.

It sold 2,524,000 Macintosh computers during the three months, up 9% on the last three months of 2007.

It also sold 22,727,000 iPods, 3% up on the previous year's quarter.

Finally, it sold 4,363,000 iPhones, 88% more than in the final quarter of 2007.

However, Apple expects revenue to fall significantly over the next three months.

"Looking forward... we expect revenue in the range of about $7.6bn to $8bn," said Peter Oppenheimer, Apple's chief financial officer.

"It was a great quarter and better than most people expected," said Yair Reiner, analyst at Oppenheimer.

The results come after reports that Apple faces a review by the US Securities and Exchange Commission to check that its recent disclosures about Steve Jobs's health did not mislead investors.

China's economic growth slows

China's economic growth slowed to 9% last year, performing particularly badly towards the end of the year.

The world's third-largest economy was hit hard by the global financial crisis that led to a fall in orders for Chinese exports.

But the official who announced the figures said the economy had still done relatively well in trying times.

He said the outlook for this year was good, although millions of migrant workers have already lost their jobs.

China's economy grew by 13% in 2007, according to revised figures released recently. But it did not do quite so well last year.

At a press conference to announce last year's figures, Ma Jiantang, head of the national bureau of statistics, said: "In 2008, we saw an eventful and extraordinary year."

He said China's economy had been affected by a series of natural disasters, such as the earthquake in May, and by the financial crisis.

Millions left jobless

It is this last event that has hit the Chinese economy hardest - and the crisis is getting worse, said Mr Ma.

The figures show China's economic growth slowed rapidly towards the end of the year.

Growth in the first quarter of last year was 10.6%, but that had slowed to just 6.8% in the last three months of 2008 - after the financial crisis had struck.

That crisis has led to less demand for Chinese products across the world.

Mr Ma revealed that millions of migrant workers - villagers who travel to cities to work in factories - had already lost their jobs.

He did not give an absolute figure for the number of migrants who are now jobless, but he said a survey showed about 5% had lost their jobs.

China's Academy of Social Sciences recently said that there were about 200 million migrant workers - meaning about 10 million migrants are now unemployed.

Independent Chinese economist Andy Xie said the number of migrant workers without jobs could rise to more than 20 million.

"A lot of factories are not going to reopen after the Chinese New Year. The workers will be told not to come back," he said.

China worries that these unemployed people will cause an increase in social unrest if they are unable to find new jobs.

Mr Ma acknowledged that this was a problem. "[We] take this issue of migrant workers very seriously," he said.

To reinforce the point, he reminded those listening that China's communist leaders were improving ordinary people's living standards.

"Despite all economic difficulties, the incomes of both urban and rural households continue to climb," he said.

Oil edges up above $41 but eyes weak stocks, demand

Oil edged up above $41 a barrel on Wednesday as the March U.S. futures contract took over as front month, but fears about a deep recession and weak demand continued to keep prices in check.

Asian stock markets opened lower, with Japan's Nikkei down around 2 percent after global stocks and bond prices fell in the previous session with benchmark S&P 500 and Nasdaq market both losing more than 5 percent.



U.S. light crude for March delivery rose 26 cents to $41.10 a barrel after falling $1.73 the previous day.



The February contract, which expired on Tuesday, settled up $2.23, or about 6 percent at $38.74 a barrel on short-covering.



London Brent crude settled down 88 cents at $43.62 and was trading up 18 cent at $43.80.



''Weakness in oil consumption continues to weigh on the oil price,'' the Commonwealth Bank of Australia said in its daily commodity report.



The International Energy Agency, a leading energy watchdog, last week joined the ranks of forecasters predicting a fall in global oil demand this year and cut its estimate for 2009 demand by 940,000 barrels per day to 85.3 million bpd, a fall of about 500,000 year-on-year.



Oil has plunged from record highs above $147 a barrel in July as a global economic slowdown has slashed oil consumption, prompting the Organization of Petroleum Exporting Countries (OPEC) to agree to a series of output cuts aimed at balancing the market and supporting prices.



OPEC is fully enforcing its deepest ever oil supply curbs, whichh should be enough to boost prices, the group's president, Angolan oil minister Botelho de Vasconcelos, told Reuters on Tuesday.



But demand has yet to respond to the cuts. China, one engine in the six-year commodity price rally that started in 2002, was expected to release fourth-quarter GDP data this week that economists say will show 7.0 percent growth, the slowest pace of expansion in nearly a decade for the world's third-biggest economy.



A Reuters poll of analysts forecast that crude oil stocks in the United States, the world's biggest consumer, rose by 1.4 million barrels last week, with distillate stocks seen down 1.4 million barrels due to cold winter weather.



Gasoline stocks would be up 2.1 million barrels, up 5.1 millionFRbarrels from a year ago.

Rupee rises; up by 21 paise to 48.90 a dollar

The Indian rupee appreciated 21 paise against the US currency on Thursday in early trade on dollar selling by banks and exporters amid hopes of firm opening on the domestic stock markets in line with better trends on other Asian bourses.

At the Interbank Foreign Exchange (Forex) market, the domestic currency traded higher at 48.90 against the US

currency, a rise of 21 paise over the previous close of 49.11/12 a dollar.



On Wednesday, the rupee gained 9 paise to close at 49.11/12 a dollar.



Forex dealers said dollar selling by banks, recovery on the Asian equity markets and hopes of Indian stock markets opening higher, helped the rupee to strengthen.



The dollar's weakness against some other Asian currencies also supported the rupee, they said.



Among Asian markets, Hong Kong's Hang Seng rose 1.23 per cent, while Japan's Nikkei remained almost flat in early trade on Thursday.

Satyam Board begin crucial two-day meet today

The six-member board of Satyam Computer Services is holding the crucial two-day meeting in Hyderabad on Thursday, to discuss among other things issues concerning mobilisation of finances and a strategy to hold major clients.

The third meeting in a row, the board will also consider appointment of chief executive officer and chief financial

officer the two key posts needed to revive the company.



The government had appointed Tarun Das, T N Manoharan and S Balkrishna Mainak, on Satyam's board, which already had Deepak Parekh, Kiran Karnik and C Achuthan.



After its last meeting on 17th January, the board of troubled Satyam had said that it was looking for funds, for

which it had opened a dialogue with lenders, to ensure salaries to employees and normal business operations, even as the search for a new CEO and CFO continued.



Representatives of a few lenders, including Citibank and ICICI Bank, had visited the Satyam headquarters, presumably for discussions with the new leadership of the IT company.



The second board meeting also constituted an audit panel and had appointed legal advisors Amarchand & Mangaldas, Suresh A Shroff & Co to the board, and internal auditors Brahmayya & Co.