IBM Reports 2018 Third-Quarter Results

IBM today announced its 2018 third-quarter results, generating its best year-to-year gross margin performance in three years, which reflected the company’s move towards higher value businesses.

Highlights are as follows:

• GAAP EPS from continuing operations of $2.94; Operating (non-GAAP) EPS of $3.42
• Revenue of $18.8 billion, down 2 percent (flat adjusting for currency)
• Strategic imperatives revenue of $39.5 billion over last 12 months, up 13 percent (up 11 percent adjusting for currency)
• Cloud revenue of $19.0 billion over last 12 months, up 20 percent (up 18 percent adjusting for currency) 
• As-a-service annual exit run rate for cloud revenue of $11.4 billion in the quarter, up 21 percent year to year (up 24 percent adjusting for currency)
• Strong services gross profit margin expansion year to year
• Maintains full-year operating (non-GAAP) EPS and free cash flow expectations

“IBM’s progress and momentum this year in the emerging, high-value segments of the IT industry are driven by our innovative technology, deep industry expertise and commitment to trust and security,” said Ginni Rometty, IBM chairman, president and chief executive officer.  “Our leadership in the technology and services that deliver hybrid cloud, AI, blockchain, analytics and security has helped drive our overall performance, and is helping our clients unleash the full business value of these innovations.”

IBM 4Q 2010 Earnings Debrief

IBM’s fourth quarter earnings for 2010 were just released over the wire.  Key headlines include record revenue of $29.0B in the quarter, up 7 percent as reported and adjusting for currency.

Diluted earnings per share were $4.18, up 16 percent.

Also, record net of $5.3B, up 9 percent.

Pre-tax income was $7B, up 9 percent, and software revenue was up 11 percent (excluding divested PLM operations).

Services revenues were up 2 percent, with a services backlog of $142B (up $5B year over year).

“We completed an outstanding year, with record profit and free cash flow, and exceeded the high end of our 2010 earnings per share roadmap objective,” said Samuel J. Palmisano, IBM chairman, president and chief executive officer.

“We also capped a decade in which our shift to high-value businesses, our global integration of IBM, our investment in research and development of almost $60 billion and our acquisition of 116 companies have helped us to nearly triple our EPS and return more than $100 billion to shareholders.

“As IBM enters its second century, we will continue to focus on our long-term strategic initiatives — growth markets, Smarter Planet Solutions, cloud and business analytics — as we drive to achieve our new roadmap target of operating earnings per share of at least $20 in 2015.”

More details follow:

• Record net income of $5.3 billion, up 9 percent;
• Pre-tax income of $7 billion, up 9 percent;
• Gross profit margin of 49 percent, up 0.8 points;
• Software revenue excluding divested PLM operations up 11 percent, 12 percent adjusting for currency; 7 percent including PLM;
• Systems and Technology revenue up 21 percent, 22 percent adjusting for currency;
• System z mainframe revenue up 69 percent; MIPS up 58 percent;
• Services revenue up 2 percent as reported and adjusting for currency;
• Services backlog of $142 billion, up $5 billion year over year and up $8 billion quarter to quarter;
• Growth markets revenue up 15 percent, 13 percent adjusting for currency;
• Business analytics revenue up 19 percent;
• Free cash flow of $8.7 billion, up $1.5 billion.

Full-Year 2010:

• Diluted earnings per share of $11.52, up 15 percent and $0.52 ahead of high end of 2010 roadmap; 8^th consecutive year of double-digit EPS growth;
• Revenue of $99.9 billion, up 4 percent, up 3 percent adjusting for currency; up 5 percent, 4 percent adjusting for currency, excluding PLM operations;
• Record net income of $14.8 billion, up 10 percent;
• Record free cash flow of $16.3 billion, up $1.2 billion;

Spaghetti Western Guns

The rumors of my disappearance are greatly exaggerated.

But, for the record, I will be blogging on and off these next several weeks as I combine both some personal and business travel and find myself away from the computer more than normal.

In fact, I was on the road back from a long weekend of camping and firearms practice in West Texas when IBM quarterly earnings were announced.

Thank Heavens for the BlackBerry.

Here were the headlines, just in case you missed the news:

• Diluted earnings per share of $1.97, up 16 percent;
• Revenue of $22.9 billion, up 5 percent, flat adjusting for currency;
• Net income of $2.6 billion, up 13 percent;
• Pre-tax income of $3.5 billion, up 13 percent;
• Pre-tax margin of 15.4 percent, up 1 point;
• Gross profit margin of 43.6 percent, up 0.2 point;
• Free cash flow of $1.4 billion, up approximately $400 million;
• Software revenue up 11 percent;
• Systems and Technology revenue up 5 percent;
• Services revenue up 4 percent;
• Services signings of $12.3 billion, down 2 percent;
• Consulting services signings up 18 percent;
• Strategic Outsourcing signings up 6 percent;
• Services backlog of $134 billion, up $8 billion year to year;
• Full-year 2010 earnings-per-share expectations raised to at least $11.20.

All in all, a very strong quarter in a continued challenging economic climate.

As for my firearms training, fear not, I’m not part of any militia.  Shooting firearms is considered good and proper sport here in Texas, and I was just camping out and having some good times with some very good longtime friends.

We shot everything from a Kalashnikov to an M1 to a Colt AR-15 to a Beretta .40 caliber PX-4 Storm, along with a few various and sundry shotguns as well as my friend George’s new “Spaghetti Western gun,” one of those rifles that Clint Eastwood might have used in movies like “The Good, the Bad, and the Ugly.”

For the record, I’m much better on skeet than I am with the pistol — but I’m getting closer and closer to the center of the target with the pistol, too.

The targets?  Some unfortunate and various and sundry beer cans, plastic Coke bottles filled with agua, and a whole covey of clay pigeons.

As we traveled out to San Angelo and parts beyond in my friend’s Ford pickup for our long weekend, I noticed how light the traffic was on Highway 87 compared to other parts of the world.

I missed another key announcement late last week while on my short road trip, but I didn’t want to let it go unremarked upon in this blog because it’s a matter near and dear to my heart.

Traffic.  I know I’ve mentioned in this blog how much in the past I hate it.

But for the past year, IBM has been working on the problem by helping one of my favorite cities in Europe, Stockholm, to monitor and improve traffic flow during peak hours.

The congestion management system has reduced traffic in the Swedish capital by 20 percent, reduced average travel times by almost 50 percent, decreased the amount of emissions by 10 percent and the proportion of green, tax-exempt vehicles has risen to 9 percent.

As part of its continued commitment to business analytics, IBM on Friday announced a new collaboration with KTH Royal Institute of Technology to give city of Stockholm residents and officials a smarter way to manage and use transportation.

Researchers at KTH Royal Institute of Technology in Sweden are using IBM’s streaming analytics technology, to gather real-time information from the Global Positioning System (GPS) devices on nearly 1500 taxi cabs in the city and will soon expand to gather data from delivery trucks, traffic sensors, transit systems, pollution monitors and weather information.

The data is processed using IBM’s breakthrough streaming analytics software, InfoSphere Streams, giving the city and residents real-time information on traffic flow, travel times and the best commuting options.

For example, a resident could send a text message listing their location and desired destination.

The technology would instantly process the real-time traffic, rail and weather information and provide anticipated travel times via car and public transportation, giving people an accurate and instant view of the fastest way to get to their destination.

Real-Time Predictions

Additionally, IBM announced a new version of its streaming analytics software that includes enhanced processing speeds of up to three times faster and real-time predictive analysis for data in motion.

The new version includes predictive analytics capabilities that allow organizations to make real-time predictions and discoveries based on data in motion.

Predictive analytics allows organizations to better understand and predict future behavior and answers questions like, which type of vehicle part is most likely to fail, where will crimes occur at a given time of day, and what is the likelihood a patient has a heart attack during surgery?

Because predictive models can be applied directly to the huge volumes of data in InfoSphere Streams, it generates real-time analysis and determines the likely outcomes in seconds and minutes.

Streaming analytics software is a part of IBM’s more than $10 billion investment in business analytics which includes organic innovation and acquisitions.

In addition, IBM has assembled 4,000 analytics consultants with industry expertise, and opened a network of seven analytics centers of excellence.

You can learn more in this Business Analytics and Optimization press kit. You can also watch this helpful animated video on analytics: