Summary
International Business Machines Corporation (IBM) reported its second-quarter 2013 financial results, indicating a revenue of $24.9 billion, a 3.3% decrease year-over-year (1% decrease on a constant currency basis). The company experienced a net income of $3.2 billion, or $2.91 per diluted share, down from $3.9 billion, or $3.34 per diluted share, in the prior year's quarter. The company highlighted strong performance in its higher-value, higher-margin businesses, particularly Software, which returned to mid-single-digit growth, and a notable increase in the Global Services backlog, showing the strongest growth at constant currency in four years. Despite a challenging economic environment and currency headwinds, IBM demonstrated progress in key growth initiatives like Smarter Planet, cloud, and business analytics. The company also executed workforce rebalancing actions, resulting in a significant charge in the second quarter, but indicated that normalized operating earnings per share showed an increase. Management reaffirmed its commitment to long-term value creation, emphasizing continued investment in growth areas and shareholder returns through dividends and share repurchases.
Financial Highlights
50 data points| Revenue | $24.92B |
| Cost of Revenue | $12.79B |
| Gross Profit | $12.13B |
| R&D Expenses | $1.55B |
| SG&A Expenses | $6.68B |
| Interest Expense | $98.00M |
| Net Income | $3.23B |
| EPS (Basic) | $2.93 |
| EPS (Diluted) | $2.91 |
| Shares Outstanding (Basic) | 1.10B |
| Shares Outstanding (Diluted) | 1.11B |
Key Highlights
- 1Total revenue for the second quarter was $24.9 billion, down 3.3% year-over-year (1% decrease on a constant currency basis).
- 2Net income was $3.2 billion, or $2.91 per diluted share, down from $3.9 billion, or $3.34 per diluted share, in Q2 2012.
- 3Software revenue grew 4.1% year-over-year (5.2% adjusted for currency), with key branded middleware up 9.1% (10.1% adjusted for currency).
- 4Global Services backlog increased 3.2% (7% adjusted for currency) year-over-year, the strongest growth in four years.
- 5The company recorded a $1.011 billion pre-tax charge for workforce rebalancing actions in the second quarter.
- 6Normalized operating (non-GAAP) diluted earnings per share increased 8.3% year-over-year to $3.91, excluding workforce rebalancing charges.
- 7IBM generated $3.2 billion in cash from operations and $2.7 billion in free cash flow in the second quarter.