Summary
For the first quarter ended March 31, 2007, IBM reported a revenue of $22.03 billion, a 6.6% increase year-over-year, or 3.6% when adjusted for currency. Net income from continuing operations rose by 8.0% to $1.84 billion, resulting in diluted earnings per share of $1.21, a 12.0% increase. The company saw strong performance across its segments, particularly in Software and Global Business Services. IBM's gross profit margin improved to 40.2%, marking the 11th consecutive quarter of improvement, driven by an improving business mix and productivity initiatives. While overall revenue grew, the company noted weakness in the United States, which was offset by strong performance in Asia Pacific and emerging markets. Investments in higher value capabilities, including strategic acquisitions, contributed to an 11.3% increase in total expenses. IBM also announced significant capital allocation plans, including a quarterly dividend increase of 33% and an authorization of an additional $15 billion for its stock repurchase program.
Key Highlights
- 1Total revenue increased by 6.6% to $22.03 billion, driven by growth in Software, Global Technology Services, and Global Business Services.
- 2Net income from continuing operations grew by 8.0% to $1.84 billion, with diluted EPS increasing by 12.0% to $1.21.
- 3Gross profit margin improved by 1.1 percentage points to 40.2%, marking the 11th consecutive quarterly increase.
- 4Strong performance in emerging markets, with revenue growing 24.1% (21% adjusted for currency).
- 5Software segment revenue increased by 8.8%, led by double-digit growth in key branded middleware.
- 6The company announced a 33% increase in its quarterly dividend to $0.40 per share and authorized an additional $15 billion for its stock repurchase program.
- 7Total expenses increased by 11.3%, reflecting ongoing investments in acquisitions and higher-value capabilities.