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IBM Reports Outstanding Earnings: Revenues, Income, Margins, EPS Up
IBM Summary Q4 2011 Financial performance improved, actually soared, in Q4 2011. IBM has apparently obtained a money printing concession from the Federal Reserve. Q4 is historically the peak quarter in the annual cycle and this quarter was no exception. Total revenues, operating income, net income, earnings per share, cash flow per share, gross margin, operating margin, and net margin reached multi-year highs. Debt continues within the historical range of total assets. IBM 2012 full-year guidance of $14.16 GAAP EPS is about an 8% increase YoY. IBM has a large, embedded product financing operation which results in lower financial performance than other technology companies. Financial position continues as acceptable, with adequate capital, moderate debt, and adequate liquidity.
IBM Income Statement Q4 2011 IBM reported total revenues of $29.49 billion, net income of $5.49 billion, and earnings per share of $4.62, all of which are multi-year highs. From the prior quarter Q3 2011, total revenues were +12.70%, net income +42.88%, and earnings per share +44.83%. From the prior year Q4 2010, these were +1.62%, +4.43%, and +10.53%, respectively. Gross margin, operating margin, and net margin were up and at multi-year highs of 49.93%, 24.91%, and 18.62%, respectively. Cash flow from operations of $5.97 was up QoQ and YoY and a multi-year high. The operating expense ratio of 25.02% decreased QoQ to a 4-quarter low.
IBM Balance Sheet Q4 2011 IBM's total assets were +5.70% QoQ and +2.63% YoY to a record $116.43 billion. The capital to assets ratio of 17.381% decreased QoQ and YoY to a 9-quarter low, due to an increase in Treasury Stock and Accumulated Other Comprehensive Loss within the equity accounts. The current ratio of 43.74% is an 8-quarter high. The return on assets of +14.00% dipped slightly but is above the historical average. Total debt at 26.90% of total assets is about the historical average.
IBM Outlook: Full-Year 2012 Expectations IBM said that it expects to deliver full-year 2012 GAAP earnings per share of at least $14.16; and operating (non-GAAP) earnings per share of at least $14.85. The 2012 operating (non-GAAP) earnings exclude $0.69 per share of charges for amortization of purchased intangible assets, other acquisition-related charges, and retirement-related items driven by changes to plan assets and liabilities primarily related to market performance.
IBM Financial Performance by the Quarters
IBM Cash Flow per Share and Earnings Per Share Current Cash Flow per Share of $5.97 is a multi-year high. Current Earnings per Share of $4.62 are +44.83% QoQ, +10.53% YoY, and a multi-year high. The chart averages for CFS and EPS are $3.93 and $2.89, respectively.
IBM Total Revenues, Operating Income, and Net Income Current Total Revenues of $29.49 billion is +12.70% QoQ, +1.62% YoY, and a multi-year high. Current Operating Income of $7.34 billion is a multi-year high and increased for the 4th consecutive quarter. Current Net Income of $5.49 billion is +42.88% QoQ, +4.43% YoY, and a multi-year high. The chart averages for TR, OI, and NI are $25.76 billion, $5.16 billion, and $3.87 billion.
IBM Gross Margin, Operating Margin, and Net Margin Current Gross Margin of 49.93%, Operating Margin of 24.91%, and Net Margin of 18.62% are multi-year highs. The chart averages for GM, OM, and NM are 46.40%, 20.13%, and 14.85%.
IBM Return on Assets Current Return on Assets of 14.00% is down QoQ but up YoY. IBM has a large, embedded product financing operation which results inflates assets and lowers ROA. The chart average ROA is 13.47%.
IBM Growth Rates YoY Current Total Revenues Growth Rate YoY of +1.62% and Earnings per Share Growth Rate YoY of +10.53% are below the historical average. The chart averages for TRGR and EPSGR are +4.03% and +14.67%, respectively.
IBM Segment Revenues Global Technology Services of $10.75 billion and 34.21% of total revenues is the historical segment leader. Software of $8.50 billion and 23.68% continues as the #2 segment. Systems and Technology of $5.99 billion and 19.06% has moved up to #3 segment. Global Business Services of $5.07 billion and 16.13% has dropped to #4. Global Financing of $1.12 billion and 3.55% comprises the remainder.
IBM Regional Revenues Americas of $12.5 billion and 42.35% of total revenues is the historical regional leader. Europe, Middle East, Africa of $9.6 billion and 32.53% continues as the second highest source. Asia Pacific of $6.7 billion and 22.70% is third. OEM of $714 million and 2.42% comprises the remainder.
IBM Operating Expense Ratio The current Operating Expense Ratio of 25.02% is a 4-quarter low. The chart average OER is 26.84%.
IBM REPORTS 2011 FOURTH-QUARTER AND FULL-YEAR RESULTS
ARMONK, N.Y., January 19, 2012 . . . IBM (NYSE: IBM) today announced fourth-quarter 2011 diluted earnings of $4.62 per share, compared with diluted earnings of $4.18 per share in the fourth quarter of 2010, an increase of 11 percent. Operating (non-GAAP) diluted earnings were $4.71 per share, compared with operating diluted earnings of $4.25 per share in the fourth quarter of 2010, an increase of 11 percent.
"We had a strong fourth-quarter performance, capping a year of record earnings per share, revenue, profit and free cash flow," said Ginni Rometty, IBM president and chief executive officer. "We delivered outstanding results in all four of our strategic initiatives for the quarter and the year, as we continued to realize the benefit of our long-term investments in growth markets, business analytics, Smarter Planet solutions and cloud. We are well on track toward our long-term roadmap for operating earnings per share of at least $20 in 2015."
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