Early Access

10-QPeriod: Q2 FY2014

INTERNATIONAL BUSINESS MACHINES CORP Quarterly Report for Q2 Ended Apr 29, 2014

Filed April 29, 2014For Securities:IBM

Summary

International Business Machines Corporation (IBM) reported its first-quarter 2014 financial results, showing a decline in revenue and net income compared to the prior year. Total revenue decreased by 3.9% to $22.5 billion, while net income fell 21.4% to $2.38 billion. Diluted earnings per share (EPS) were $2.29, down from $2.70 in the first quarter of 2013. This decline was attributed to various factors including workforce rebalancing charges, strategic portfolio actions like divestitures (customer care business, pending x86 server sale to Lenovo), and challenges in the Systems and Technology segment. Despite these headwinds, IBM highlighted strategic investments in growth areas such as cloud computing (SoftLayer expansion, BlueMix launch), big data (Aspera and Cloudant acquisitions), and cognitive capabilities (IBM Watson investment), which are expected to drive future growth. The company maintained a strong balance sheet and liquidity position, generating $3.3 billion in cash from operations and returning $9.2 billion to shareholders through stock repurchases and dividends.

Financial Highlights

51 data points
Beta

Revenue

$24.05B

0.5% Gross Margin

Net Income

$4.14B

0.2% Net Margin

EPS (Diluted)

$4.12

Total Assets

$124.31B

Cash & Equivalents

$9.56B

Free Cash Flow

$2.67B

Financial Statements
Beta
Revenue$24.05B
Cost of Revenue$12.00B
Gross Profit$12.04B
R&D Expenses$1.36B
SG&A Expenses$5.59B
Interest Expense$136.00M
Net Income$4.14B
EPS (Basic)$4.14
EPS (Diluted)$4.12
Shares Outstanding (Basic)999.60M
Shares Outstanding (Diluted)1.01B

Key Highlights

  • 1Total revenue for Q1 2014 decreased by 3.9% year-over-year to $22.48 billion.
  • 2Net income declined by 21.4% to $2.38 billion, with diluted EPS falling to $2.29 from $2.70.
  • 3Strategic portfolio actions included the divestiture of the customer care business and the announced sale of the x86 server business to Lenovo.
  • 4Investments were made in growth areas like cloud (SoftLayer expansion, BlueMix launch) and big data (Acquisition of Aspera and Cloudant).
  • 5The Systems and Technology segment saw a significant revenue decrease of 23.0%, driven by product cycles and secular challenges.
  • 6IBM generated $3.33 billion in cash from operating activities and returned $9.2 billion to shareholders through dividends and stock repurchases.
  • 7The company reaffirmed its full-year 2014 outlook, expecting GAAP EPS of at least $17.00 and operating (non-GAAP) EPS of at least $18.00.

Frequently Asked Questions