IT giant IBM is continuing to enjoy the “tech
rebound” of late 2009 as demonstrated by its Q1 results for 2010,
released on April 19 – but its financing arm does not appear quite
as strong.

IBM Global Financing, measured as a standalone
entity, saw a 7.1 per cent drop (12 per cent, adjusting for
currency) in revenue in the three months to 31 March 2010, compared
to 2009.

Its gross profit margin did rise from 45.9 per
cent to 49.8 per cent and its external revenue in Q1 was still well
over $500million.

But of IBM’s total debt of $26.3billion, more
than $22bn is in support of its financing business.

Its debt-to-equity ratio was leveraged at
seven to one, which Mark Loughridge, IBM’s Senior Vice President
and Chief Financial Officer, described as “appropriate”.

Internal revenue at Global Financing was up
3.5 per cent at $403m, while pre-tax income saw the most
significant rise, up 18.7 per cent at $427m.

The total revenue, including internal and
external, was down 2.9 per cent at $941m, and its pre-tax margin
was 45.4 per cent.

Claire Hack