Summary
International Business Machines Corporation (IBM) reported a solid third quarter and nine-month period ending September 30, 2011. The company demonstrated revenue growth across most segments, driven by strong performance in its Software and Global Services divisions. This growth was particularly notable in emerging "growth markets," which showed double-digit increases. IBM also managed to expand its gross profit margin, contributing to a significant increase in earnings per share (EPS) on both a reported and operating (non-GAAP) basis. The company's financial strength was evident in its robust cash flow from operations, which enabled substantial returns to shareholders through stock repurchases and dividends. Management raised its full-year EPS expectations, signaling confidence in continued performance. Strategic acquisitions in areas like risk analytics and security intelligence were also announced, underscoring IBM's commitment to expanding its capabilities in high-growth technology sectors.
Financial Highlights
48 data points| Revenue | $26.16B |
| Cost of Revenue | $13.98B |
| Gross Profit | $12.17B |
| R&D Expenses | $1.55B |
| SG&A Expenses | $5.66B |
| Interest Expense | $107.00M |
| Net Income | $3.84B |
| EPS (Basic) | $3.23 |
| EPS (Diluted) | $3.19 |
| Shares Outstanding (Basic) | 1.19B |
| Shares Outstanding (Diluted) | 1.20B |
Key Highlights
- 1Revenue increased by 7.8% (2.7% adjusted for currency) to $26.16 billion for the third quarter of 2011, and by 9.3% (4.3% adjusted for currency) to $77.43 billion for the first nine months.
- 2Net income for the third quarter rose 7.0% to $3.84 billion, or $3.19 per diluted share, up 13.1% from the prior year.
- 3Operating (non-GAAP) diluted earnings per share showed a stronger increase of 15.1% to $3.28 for the third quarter.
- 4Gross profit margin expanded by 1.2 percentage points to 46.5% in the third quarter, driven by performance in Systems and Technology and Software.
- 5Global Services revenue grew 7.7% (1.8% adjusted for currency) in the third quarter, with strong performance in growth markets.
- 6Software revenue increased 12.9% (8.1% adjusted for currency) in the third quarter, driven by strong demand for middleware, particularly WebSphere.
- 7Cash flow from operations remained strong at $12.75 billion for the first nine months, supporting significant share repurchases and dividend payments.