Saturday, October 20, 2012

IBM Earnings Review: Performance Slows

IBM reported QE September 2012 financial results on October 16

Financial performance slowed from the prior quarter and the prior year. The next quarter, Q4, is the annual cyclical high so ground hopefully will be regained then. Gross, operating, and net margins held and should be stronger next quarter. Liquidity and capital are adequate. Total assets ($115.8 billion) place IBM in the Big Tech $100 Billion Assets Club along with Apple, HP, and Microsoft.

Q4 2011 financial performance was stellar and expectations for this next Q4 2012 are high. New CEO Ginni Rometty needs to exceed to maintain the momentum. We await.

IBM lowered guidance on the full-year 2012 GAAP EPS to $14.29+ from $14.40+ (previously had been $14.27+ and earlier was $14.16+). Prior year 2011 GAAP EPS was $$13.12. The full-year 2012 Non-GAAP outlook remains at $15.10+ (earlier was $15.00+ and even earlier was $14.85+). Prior year 2011 Non-GAAP EPS was $13.49.

"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," said Ginni Rometty, IBM chairman, president and chief executive officer.

"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."


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