Revenues hold up in tough quarter for IBM profits
January 2013
Q4 at IBM was better than expected on both the bottom and top lines.
IBM reported fourth quarter earnings of $5.8 billion, or $5.13 a share, on revenue of $29.3 billion, down 1 percent from a year ago. Non-GAAP earnings were $5.39 a share.
Wall Street was expecting IBM to report fourth quarter earnings of $5.25 a share on revenue of $29.08 billion. For 2012, IBM reported earnings of $16.6 billion, or $14.37 a share, on revenue of $104.5 billion, down 2 percent from a year ago.
Overall, IBM weathered sluggish IT spending well. Software revenue was up 3 percent; services sales fell 2 percent and systems and technology sales fell 1 percent. System z mainframe sales were up 56 percent from a year ago.
“Our new hardware product introductions really performed in the quarter. We had excellent acceptance of our new mainframe and our System Z revenue was up 56% year to year, so it’s been a very successful launch. Not only in major markets, but in growth markets where we were up 65%. And we had significant growth in our mainframe specialty engines led by Linux. This is a good indicator, not only of new work loads moving onto the platform, but also the value of a vertically integrated system.” -CFO Mark Loughridge
For 2013, IBM projected GAAP earnings of $15.53 a share and non-GAAP earnings of at least $16.70 a share. Wall Street was looking for earnings of $16.63 a share.
By the numbers:
- Fourth quarter sales from Europe, Middle East and Africa fell 5 percent from a year ago to $9.1 billion. Asia-Pacific revenue in the fourth quarter was $7 billion, down 4 percent. Revenue in the fourth quarter from Brazil, Russia, India and China was up 11 percent.
- Global technology services revenue fell 2 percent in the fourth quarter and global business services sales were down 3 percent. Backlog was flat.
- Software sales in the fourth quarter was $7.9 billion, up 3 percent from a year ago. Pre-tax earnings in the quarter was up 8 percent from a year ago.
- Hardware revenue was $5.8 billion in the fourth quarter, down 1 percent from a year ago. Cloud revenue for 2012 was up 80 percent.
