IBM reported its earnings for the third quarter of 2012 yesterday, with its net income growing to $3.8 billion, nearly flat year-over-year, and its revenues shrinking 5% to $24.7 billion. Most of the decline in revenue growth can be attributed to the economic slowdown in Europe and other parts of the world.

Virginia Rometty, IBM chairman, president and CEO, said:

“In the third quarter, we continued to drive margin, profit and earnings growth through our focus on higher-value businesses, strategic growth initiatives and productivity.

Looking ahead, we see good opportunity with a strong product lineup heading into this quarter and annuity businesses that provide a solid base of revenue, profit and cash. We are reiterating our full-year 2012 operating earnings per share expectation of at least $15.10.”

IBM makes money primarily from three segments — services, software and hardware. Its technology services revenue declined 4% to $9.9 billion while business services revenue declined 6% to $4.5 billion.

Software revenue declined marginally to $5.8 billion, while hardware revenue totaled $3.9 billion, down 13% year-over-year. The global financing segment contributed $472 million to its top line.

IBM’s cash and cash equivalents grew to almost $12 billion this quarter.

via IBM – SEC