24/7 Wall St. will name its annual CEO of the Year next week. The executive will be picked from a field of ten which we will profile this week

The CEOs are chosen on the basis of their company’s stock market and financial performances compared with their own industry groups and all large companies traded on US markets. Only firms with market caps of more than $5 billion were considered. 24/7 reviewed revenue growth, operating margins, balance sheets, return on assets, and return on equity

IBM (IBM) used to be the Blue Chip’s Blue Chip, the greatest technology company in the world. In 1998, IBM was No. 6 on the Fortune 500 list. In 1999, the stock traded at $129.

Years of missing boats like PCs, software, and cheap servers pushed IBM into trouble. It took several years to get back out. The technology giant used to be more visible than it is now, but today it is more successful. Most of the credit for that belongs to Samuel Palmisano. Since he took over in 2002, IBM’s revenue has risen from $81.1 billion to $109.3 billion for the latest trailing four quarters. Operating profit has jumped from $7.5 billion to $20.2 billion over the same period.

Palmisano has built IBM into the most diversified tech operation in the world, with huge businesses in hardware, software, and services. It is in the position where its rivals like HP would like to be.

A look at IBM’s last quarter shows how balanced the company’s operations have become. Out of $25.2 billion in revenue, $9.9 billion came from technology services, $4.9 billion from business services, $4.4 billion from systems, and $5.2 billion from software. Gross margins at three of the four units increased over the same quarter last year.

That’s a reinvention.

Douglas A. McIntyre

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