IBM Announces 3Q 2012 Earnings

IBM’s 3Q 2012 earnings were just announced, with diluted earnings of $3.33 per share, a year-to-year increase of 4 percent, or $3.44 per share, up 8 percent excluding the impact of UK pension-related charges.

Operating (non-GAAP) diluted earnings were $3.62 per share, compared with operating diluted earnings of $3.28 per share in the third quarter of 2011, an increase of 10 percent.

Total revenues for the third quarter of 2012 of $24.7 billion were down 5 percent (down 2 percent, adjusting for currency) from the third quarter of 2011. Currency negatively impacted revenue growth by nearly $1 billion.

IBM chairman, president, and CEO Ginny Rometty had this to say about the quarter’s financial performance: “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.”

Following are further highlights from the quarter:

Diluted EPS:

• GAAP: $3.33, up 4 percent; $3.44, up 8 percent excluding UK pension-related charges;
• Operating (non-GAAP): $3.62, up 10 percent;

Net income:

• GAAP: $3.8 billion, flat; $3.9 billion, up 3 percent excluding UK pension-related charges;
• Operating (non-GAAP): $4.2 billion, up 5 percent;

Gross profit margin:

• GAAP: 47.4 percent, up 0.9 points;
• Operating (non-GAAP): 48.1 percent, up 1.2 points;

Revenue: $24.7 billion, down 5 percent, down 2 percent adjusting for currency;

• Negative currency impact of nearly $1 billion;
• Divestiture of Retail Store Solutions (RSS) reduced revenue by 1 percent;

Software revenue down 1 percent, up 3 percent adjusting for currency;

Services revenue down 5 percent, flat adjusting for currency;

Services backlog of $138 billion, up 1 percent;

Systems and Technology revenue down 13 percent, down 12 percent adjusting for currency;

Growth markets revenue down 1 percent, up 4 percent adjusting for currency;

• BRIC countries up 4 percent, up 11 percent adjusting for currency;

Business analytics revenue up 14 percent year to date;

Smarter Planet revenue up more than 20 percent year to date

Cloud revenue year to date has exceeded full-year 2011 revenue;

Reiterating full-year 2012 operating (non-GAAP) EPS expectation of at least $15.10.

Singapore Sling

Resorts World Sentosa in Singapore will play host to a new, first-of-its-kind IT event in Singapore this October 9-11, where smart businesses from around the globe that have been busy implementing new business and IT strategies will come together to network with IBM clients, industry experts, and IBM thought leaders and learn how they’re converting opportunity into outcomes.

It was a big day today in Singapore, where the country celebrated its independence, and where government leaders encouraged Singaporeans to make even more Singaporeans, in order to counter the country’s declining birthrate, which is among the lowest in the world at 7.72 births per 1,000 people.

I’m sure a few Singapore Slings may have been consumed, and I would have been right there with them, as the Raffles Hotel is definitely on my list of places to frequent for when I visit.

And that will be sooner rather than later, as IBM is going to be hosting a new, first-of-its-kind event at the Resorts World Sentosa this October 9th-11th.

This new IBM event will share with attendees the breadth of IBM’s integrated software and systems solutions capabilities, and demonstrate IBM’s strategic perspective on becoming a smarter busienss that excels in turning opportunity into outcomes in this new era of computing.

At the event, IBM will focus discussions on a variety of key “hot topics,” including those focused on speeding innovation with mobile computing, defending against cyber-threats with security intelligence, rethinking IT with cloud computing, and a host of others.

If you’re game, but need some compelling reasons to convince your boss to send you to Singapore, here’s a starter list:

1. Networking. You’ll have the opportunity in Singapore to network with peers, industry experts, and IBM thought leaders from around the globe, including IBM customers already collaborating to better align business and technology investments.
2. Learning. You’ll have the opportunity to learn from experts in our Solution Center, as well as through a personalized agenda of keynote session, “Hot Topic” sessions, and Exchange sessions built around your business interests.
3. Delivering New Value. At IBM Interconnect, you’ll become one of the first to learn how to manage the velocity of change from real world examples of business delivering new value to the people they serve.
4. Unleashing Innovation. You’ll also have the opportunity to begin to understand the new economics of IT, and how to use technology as the catalyst for unleashing innovation in your organization.
5. Uncovering New Markets. And finally, in an environment where most every organization is looking for new customers in new markets, you’ll have the opportunity to start to develop a clear plan of how you can reinvent relationships with yoru customers and workforce and, in turn, start to uncover those new markets.

Changing With The Changing Times

Rapid change has become the new normal, as entire industries are now transforming to deliver compelling new value to their customers. In this era of interconnected industries, businesses and consumers, a new kind of leadership is required to turn opportunity into business outcomes.

Smarter businesses are capitalizing on information as an indispensable resource and using technology as the catalyst for unleashing innovation. They are expanding the digital world of the back-office into the front-office and the corresponding business infrastructures that are at the heart of business leadership and operations; the key interconnection points among consumers, business partners and employees.

Take advantage of this opportunity to develop a personalized agenda around your business needs, collaborate with business decision-making peers, and meet face-to-face with technical decision-makers and industry experts.

You can start by first going here to register, then heading on over to the Session Preview Tool to start scanning the sessions to make sure you get the most out of your visit.

If you’ve never visited Singapore, I can’t recommend it highly enough. It’s like visiting a future that has already arrived, and in the meantime, you’ll have the opportunity to attend an IBM event that’s intended to help you create a future looming just over the horizon.

IBM And Mobily: Spoken Like A True, Modern Mobile Network

IBM’s mobile computing juggernaut continues with a new deal just announced in Saudia Arabia.

Etihad Etisalat (Mobily) and IBM announced today a 5-year agreement worth approximately $280 million to provide comprehensive IT solutions for the Saudi Arabian company.

Saudi Arabia: 870,000 Square Miles

Riyadh is the capital and largest city of Saudi Arabia. It is also the capital of Riyadh Province, and belongs to the historical regions of Najd and Al-Yamama (Source: Wikipedia) IBM and Mobily, the Saudi Arabian telecommunications firm, will collaborate on future innovation with the help of IBM Research, using IBM’s Spoken Web solution. The basic principle of Spoken Web uses speech to create voice sites using the mobile phone network to establish a spoken version of the internet. The opportunity to collaborate with leading IBM researchers has become a key differentiator for IBM.

Saudi Arabia is a big place, encompassing some 870,000 square miles with a population approaching 30 million people.  Mobily, as the fastest growing telecommunications company in Saudia Arabia, has experienced an explosion in demand from the growing number of subscribers using mobile devices, and so in turn needed to boost its IT capacity and innovation in the market.

This new agreement with IBM will provide Mobily with faster, targeted access to new technologies and expertise so it can build a strong infrastructure to keep up with the company’s business growth.

As Mobily gears up for further expansion, it wanted to improve the quality and speed of its operations using IBM best practices.

As part of the agreement, Mobily and IBM will collaborate on future innovation with the help of IBM Research, for example, using IBM’s Spoken Web solution.

The basic principle of Spoken Web uses speech to create voice sites using the mobile phone network to establish a spoken version of the internet. The opportunity to collaborate with leading IBM researchers has become a key differentiator for IBM.

IBM’s Growth Market Strategy

The agreement highlights IBM’s continued geographic expansion initiative to strategically increase its presence in key growth markets like Saudi Arabia in support of its global growth strategy.

IBM is ramping up its investment across the Middle East and Africa, harnessing the company’s Smarter Planet initiative to help both public and private sector clients do more with fewer resources.

The strategic management of IT remains with Mobily, ensuring continuation of its standards of excellence and cutting-edge architecture, and enabling Mobily to meet the explosion in demand it is seeing from the growing number of subscribers using mobile devices.

“Partnering with one of the largest technology companies in the world offers Mobily a broad portfolio of modern IT solutions that will have a positive impact on our customers in terms of the quality of products and innovative services, in addition to solutions that will enrich their lives. We are pleased to sign with IBM, which has a significant presence in this strategic sector,” said Khalid Al Kaf, CEO, Mobily.

“The agreement is part of our efforts and vision of transforming Mobily into an integrated telecommunications operator. It also supports the Saudi government’s initiative of creating a knowledge-based community, adopting state of the art services and solutions” Al Kaf added.

IBM And Saudi Arabia: Remaking The Kingdom’s Future

IBM is involved in a range of key initiatives in Saudi Arabia, including a joint project with King Abdulaziz City for Science and Technology using innovative membrane technology and solar power to address the shortage of drinking water.

In another project, King Abdullah University of Science and Technology (KAUST) and IBM are collaborating using the most complex, high performance computing system in the region.

The agreement with Mobily was signed in August 2012.