By Eric Auchard
NEW YORK (Reuters) - International Business Machines Corp (IBM.N: Quote, Profile, Research, Stock Buzz) is optimistic it can hit its 2010 profit target as the focus on emerging markets helps insulate the world's top computer services provider from the global credit crunch, its chief financial officer said on Wednesday.
"I think we are well on track," International Business Machines Corp CFO Mark Loughridge told the Reuters Global Technology, Media and Telecoms Summit in New York.
"I'm not going to reintroduce a forecast today, but if you look at the performance, we have had some pretty encouraging signs," he said, when asked if IBM could beat its earnings goal of $10 to $11 per share by 2010.
IBM shares, which are trading just off six-year-high levels reached a week ago, ticked higher on the news before succumbing to downward pressure on the overall market. The stock slipped 14 cents to $125.04 on the New York Stock Exchange.
Loughridge underscored that IBM isn't counting on recovery in established G7 markets for growth this year, and is looking instead to emerging markets ranging from Poland to Argentina and Mexico to the Philippines.
"If I were in a business model where I needed double-digit growth out of the G7 to drive my performance, I would be in a cold sweat," he said.
"We're not counting on a resurgence or recovery to achieve our growth for the year," he said of the G7 nations -- the United States, Japan, Germany, Britain, Italy, France and Canada.
"But we are counting on the high-growth markets to continue to grow," he said, noting that the company enjoyed more than 10 percent growth in 50 countries last year.
Financial services, IBM's biggest customer segment but also one sector hardest hit by the economic downturn, highlights how the company's move into emerging markets insulates it from the Wall Street slump.
IBM generates 28 percent of global revenues from financial services customers, but fully 75 percent of that business comes from outside the United States. The company is building major banking systems in China, India and Russia.
Even in the United States, IBM is benefiting from strong short-term contract signings in recent quarters as banks and brokers increase spending on risk analysis and compliance tools, Loughridge said. "I think there's plenty of spend in this environment," he said of U.S. financial customers.
The executive said IBM has gauged its investments and expectations "more conservatively in all the established G7-like markets" amid worries about slower growth and credit concerns in the U.S.
Loughridge downplayed concerns that any slowdown in the developed economies could spread to emerging markets.
"I personally see less linkage, dependency, between the established markets and the high growth markets," he said.
NO LET-UP ON 2010 PROFIT GOAL Continued...
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