Early Access

10-QPeriod: Q2 FY2010

INTERNATIONAL BUSINESS MACHINES CORP Quarterly Report for Q2 Ended Jun 30, 2010

Filed July 27, 2010For Securities:IBM

Summary

International Business Machines Corporation (IBM) reported its second quarter and first half 2010 financial results. For the second quarter, total revenue increased by 2.0% to $23.7 billion, with net income rising 9.1% to $3.4 billion, translating to diluted earnings per share of $2.61, a 12.5% increase year-over-year. For the first six months, revenue grew 3.6% to $46.6 billion, and net income increased 10.9% to $6.0 billion, with diluted earnings per share reaching $4.57, up 13.7% compared to the prior year. The company demonstrated improved revenue growth, particularly in its growth markets and key software areas like business analytics and middleware. Despite a strengthening U.S. dollar impacting reported figures, IBM managed to expand its gross profit margin and net income margin, showcasing effective cost management and operational leverage. Acquisitions in the Software segment contributed to growth, further enhancing IBM's portfolio. The company also reiterated its positive full-year 2010 earnings per share outlook, expecting at least $11.25.

Financial Highlights

48 data points
Beta

Revenue

$23.72B

0.5% Gross Margin

Net Income

$3.39B

0.1% Net Margin

EPS (Diluted)

$2.61

Total Assets

$103.42B

Cash & Equivalents

$10.32B

Free Cash Flow

$2.94B

Financial Statements
Beta
Revenue$23.72B
Cost of Revenue$12.91B
Gross Profit$10.81B
R&D Expenses$1.48B
SG&A Expenses$5.06B
Interest Expense$90.00M
Net Income$3.39B
EPS (Basic)$2.65
EPS (Diluted)$2.61
Shares Outstanding (Basic)1.28B
Shares Outstanding (Diluted)1.30B

Key Highlights

  • 1Total revenue for Q2 2010 increased 2.0% year-over-year to $23.7 billion, with a 1.6% increase adjusted for currency.
  • 2Net income for Q2 2010 rose 9.1% to $3.4 billion, leading to diluted EPS of $2.61, a 12.5% increase compared to Q2 2009.
  • 3For the first six months of 2010, revenue grew 3.6% to $46.6 billion, and net income increased 10.9% to $6.0 billion.
  • 4Growth markets revenue increased significantly by 13.7% (9% adjusted for currency) in Q2, driven by BRIC countries.
  • 5Software segment revenue showed strong performance, with key branded middleware up 9.4% (10% adjusted for currency) in Q2.
  • 6The company repurchased approximately 32.4 million shares of common stock in Q2 2010, contributing to EPS growth.
  • 7IBM reiterated its full-year 2010 earnings per share outlook, expecting at least $11.25 per diluted share.

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