How did IBM's revenue and profit perform in the third quarter of 2009 compared to the same period in 2008?

In the third quarter of 2009, IBM's total revenue decreased by 6.9% to $23.6 billion. However, net income increased by 13.8% to $3.2 billion, and diluted earnings per share (EPS) grew by 17.6% to $2.40, reflecting strong profit growth driven by margin expansion and effective expense management.

What were the key drivers of the improved profitability despite the revenue decline?

Profitability was bolstered by a significant expansion in gross profit margin, which rose to 45.1% due to improved margins in the Global Services and Software segments. Additionally, disciplined expense management led to a decrease in total expense and other income, and a favorable tax rate also contributed to the net income improvement.

How did the different business segments perform in terms of revenue?

Revenue performance varied by segment. Global Technology Services revenue declined 4.4% (2% adjusted for currency), Global Business Services decreased 11.5% (11% adjusted for currency), Software revenue was flat year-over-year (down 2.6% as reported), Systems and Technology fell 11.6% (11% adjusted for currency), and Global Financing saw a 15.4% decline (13% adjusted for currency).

What is IBM's outlook for the full year 2009?

IBM raised its full-year 2009 earnings per share projection to at least $9.85, indicating confidence in its ongoing strategy and performance, and expects to achieve double-digit EPS growth for the year compared to 2008.

IBM 10-Q Quarterly Report Q3 FY2009 — Revenue, Net Income, EPS

Summary

International Business Machines Corporation (IBM) reported its third-quarter and nine-month results for the period ending September 30, 2009. For the third quarter, revenue declined 6.9% year-over-year to $23.6 billion, while net income increased 13.8% to $3.2 billion, resulting in diluted earnings per share (EPS) of $2.40, up 17.6%. The company highlighted strong profit growth driven by margin expansion, particularly in its Software and Global Services segments, and effective expense management. For the first nine months, revenue decreased 10.6% to $68.5 billion, but net income rose 8.9% to $8.6 billion, with diluted EPS of $6.42, up 13.6%. IBM's ongoing transformation, focus on higher-value solutions, and disciplined cost structure continue to drive profitability despite challenging economic conditions. The company also reported a strong cash flow from operations of $14.3 billion for the first nine months and maintained a robust liquidity position.

Financial Highlights

46 data points

Beta

Revenue

$23.57B

0.5% Gross Margin

Net Income

$3.21B

0.1% Net Margin

EPS (Diluted)

$2.40

Total Assets

$103.67B

Cash & Equivalents

$9.53B

Free Cash Flow

$5.20B

Financial Statements

Beta

Revenue	$23.57B
Cost of Revenue	$12.94B
Gross Profit	$10.63B
R&D Expenses	$1.45B
SG&A Expenses	$5.01B
Interest Expense	$84.00M
Net Income	$3.21B
EPS (Basic)	$2.44
EPS (Diluted)	$2.40
Shares Outstanding (Basic)	1.32B
Shares Outstanding (Diluted)	1.34B

Key Highlights

1Total revenue for the third quarter was $23.6 billion, a decrease of 6.9% year-over-year (down 5.0% adjusted for currency).
2Net income for the third quarter increased by 13.8% to $3.2 billion.
3Diluted earnings per share (EPS) for the third quarter rose 17.6% to $2.40.
4Gross profit margin improved to 45.1% in the third quarter, up 1.8 percentage points year-over-year, driven by improved margins in Global Services and Software.
5For the first nine months, revenue was $68.5 billion, down 10.6% (down 5.3% adjusted for currency), while net income grew 8.9% to $8.6 billion.
6Cash flow from operating activities for the first nine months was $14.3 billion, an increase of $2.1 billion year-over-year.
7IBM raised its full-year 2009 EPS projection to at least $9.85.

INTERNATIONAL BUSINESS MACHINES CORP Quarterly Report for Q3 Ended Sep 30, 2009

Summary

Financial Highlights

Key Highlights

Frequently Asked Questions