Summary
IBM reported total revenue of $23.4 billion for the first quarter of 2013, a decrease of 5.1% (3.2% adjusted for currency) compared to the prior year. Despite the revenue decline, the company saw an expansion in gross and net income margins, resulting in a slight decrease in net income to $3.03 billion from $3.07 billion in the prior year. Diluted earnings per share (EPS) were $2.70, an increase of 3.4% from the prior year, and operating (non-GAAP) diluted EPS grew by 7.9% to $3.00, indicating strong operational performance excluding certain charges. The company generated $4.0 billion in cash from operations, though this was a decrease from the prior year due to a decline in the accounts receivable clearance rate and higher tax payments. IBM returned $3.5 billion to shareholders through stock repurchases and dividends. Management highlighted sales execution challenges in the Software and System z mainframe businesses that caused some profitable transactions to not close in the quarter, impacting overall results but positioning the company for a strong start in the second quarter. The company reaffirmed its full-year 2013 GAAP EPS guidance of at least $15.53 and operating (non-GAAP) EPS guidance of at least $16.70.
Financial Highlights
50 data points| Revenue | $23.41B |
| Cost of Revenue | $12.73B |
| Gross Profit | $10.68B |
| R&D Expenses | $1.64B |
| SG&A Expenses | $5.58B |
| Interest Expense | $94.00M |
| Net Income | $3.03B |
| EPS (Basic) | $2.72 |
| EPS (Diluted) | $2.70 |
| Shares Outstanding (Basic) | 1.11B |
| Shares Outstanding (Diluted) | 1.12B |
Key Highlights
- 1Total revenue for Q1 2013 was $23.4 billion, down 5.1% year-over-year (3.2% adjusted for currency).
- 2Net income decreased slightly to $3.03 billion, down 1.1% from $3.07 billion in Q1 2012.
- 3Diluted EPS increased by 3.4% to $2.70, and operating (non-GAAP) diluted EPS grew by 7.9% to $3.00.
- 4Cash flow from operations was $4.0 billion, a decrease from the prior year primarily due to lower receivables clearance and higher tax payments.
- 5The company returned $3.5 billion to shareholders via stock repurchases and dividends.
- 6Sales execution challenges in Software and System z caused some transactions to roll over into Q2, impacting Q1 results but providing a positive outlook for Q2.
- 7The company reaffirmed its full-year 2013 GAAP EPS guidance of at least $15.53 and operating (non-GAAP) EPS guidance of at least $16.70.