IBM Reports 4Q18 Earnings, Margin Expansion, Return to Full-Year Revenue Growth

IBM announced 4Q18 earnings this afternoon.

The top line:

• GAAP EPS from continuing operations of $2.15
• Includes charge of $1.9 billion related to the U.S. Tax Cuts and Jobs Act of 2017
• Operating (non-GAAP) EPS of $4.87
• Revenue of $21.8 billion, down 3 percent (down 1 percent adjusting for currency)
• Global Business Services and Cognitive Solutions revenue grew year to year
• Gross profit margin up 10 basis points year to year; pre-tax income margin up more than 50 basis points year to year
• Continued strong services gross profit margin expansion year to year
• Full Year:
• GAAP EPS from continuing operations of $9.51
• Includes charge of $2.0 billion related to the U.S. Tax Cuts and Jobs Act of 2017
• Operating (non-GAAP) EPS of $13.81
• Revenue of $79.6 billion, up 1 percent (flat year to year adjusting for currency)
• Strategic imperatives revenue of $39.8 billion, up 9 percent
• Cloud revenue of $19.2 billion, up 12 percent
• As-a-service annual exit run rate for cloud revenue of $12.2 billion in the quarter, up 18 percent year to year (up 21 percent adjusting for currency) IBM)

“In 2018 we returned to full-year revenue growth, reflecting growing demand for our services and leadership solutions in hybrid cloud, AI, analytics and security,” said Ginni Rometty, IBM chairman, president and chief executive officer. “Major clients worldwide, such as BNP Paribas, are turning to the IBM Cloud and our unmatched industry expertise to transform their businesses and drive innovation.”