International Business Machines Corp. (IBM) Beats Q4 EPS Estimates

International Business Machines Corp. (NYSE:IBM) released its latest quarterly earnings report after closing bell. The company’s GAAP earnings per share were $5.73, a 12% year over year increase. Non-GAAP earnings per share were $6.13, a 14% increase. Net income was reported to be $6.2 billion for the quarter, a 6% increase. Operating income was $6.6 billion, an increase of 8%. Revenue was $277 billion, a 5% decline. After adjusting for currency exchange rates, revenue was down 3%.

Analysts had been expecting the company to report earnings of between $5.99 and $6.03 per share on revenue of $28.26 billion. For the full year, they were expecting earnings of around $16.88 per share on revenue of about $100 billion.

Shares of IBM declined more than 2% after the results were announced.

Breaking down IBM’s results

International Business Machines Corp. (NYSE:IBM) reported a gross profit margin of 51.7%, a .1 point decline. Operating margin was 52.6%, a .3 point increase. The company saw its Software revenue increase by 3%, or 4% if adjusting for currency. Global financing revenue was flat but up 3% after adjusting for exchange. Services revenue fell 2% or 1% with currency adjustment. But where IBM’s revenue especially fell short was in Systems and Technology, where it declined 26^ or 25% adjusting for currency.

IBM reported $143 billion in Services backlog, which is a 2% increase, and $8.4 billion in free cash flow.

Examining IBM’s full-year results

For the full 2013 fiscal year, International Business Machines Corp. (NYSE:IBM) reported GAAP earnings per share of $14.94, a 4% increase. Non-GAAP earnings per share for the full year rose 7% to $16.28. Non-GAAP earnings excluding rebalancing charges taken in the second quarter were $16.99 per share.

The company’s net income for the full year was reported to be $16.5 billion, a 1% decline. Non-GAAP operating net income rose 2% to $18 billion for the full year. Revenue was $99.8 billion, a decline of 5%.

In pretax income, IBM reported higher profits in all but Systems and Technology, where profits fell $1.7 billion to a loss of over $500 million for the full year. The company reported a 20% increase in Smarter Planet revenue and a 9% increase in Business Analytics revenue. Cloud revenue rose 69% for the full year.

IBM also provided guidance for the full 2014 year, saying that it expects earnings per share of at least $17 and operating non-GAAP earnings of at least $18 per share.

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About the Author

Michelle Jones
Michelle Jones was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Michelle has been with ValueWalk since 2012 and is now our editor-in-chief. Email her at [email protected]

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