8-KRegulation FDExhibits & Filings

INTERNATIONAL BUSINESS MACHINES CORP 8-K Report, Regulation FD Disclosure (Jan 23, 2019)

Filed January 23, 2019For Securities:IBM

Summary

IBM filed an 8-K on January 23, 2019, primarily disclosing prepared remarks and supplementary materials from its Q4 and full-year 2018 earnings presentation held on January 22, 2019. The filing provides forward-looking guidance and financial expectations for the company in 2019. Key information for investors includes expectations for expanded gross and pre-tax margins, specific GAAP and non-GAAP tax rate projections for 2019, and details on expected first-quarter 2019 earnings per share (both GAAP and non-GAAP) as a percentage of the full-year outlook. Additionally, the report highlights anticipated currency headwinds affecting first-quarter 2019 revenue growth and provides an outlook for sequential improvement in revenue growth at constant currency. This filing serves as a crucial update for investors, offering insights into IBM's financial strategy and performance expectations for the upcoming fiscal year.

Key Highlights

  • 1IBM provided its Q4 and full-year 2018 earnings presentation materials, including prepared remarks and non-GAAP reconciliations.
  • 2The company expects to expand gross and pre-tax margins in 2019.
  • 3Projected GAAP tax rate for full-year 2019 is approximately 14% (excluding discrete items).
  • 4Projected operating (non-GAAP) tax rate for full-year 2019 is approximately 11% to 12%, representing a 3-4 point year-over-year headwind.
  • 5First-quarter 2019 GAAP EPS is expected to be 16% of the full-year expectation (at least $12.45).
  • 6First-quarter 2019 operating (non-GAAP) EPS is expected to be 16% of the full-year expectation (at least $13.90).
  • 7A 4-point currency headwind is anticipated for Q1 2019 revenue growth, worse than Q4 2018's impact, with sequential improvement in constant currency revenue growth expected from Q4 2018 to Q1 2019.

Frequently Asked Questions

The main purpose of this 8-K filing is to disclose IBM's prepared remarks and supplementary materials from its fourth-quarter and full-year 2018 earnings presentation to investors, providing forward-looking guidance and financial expectations for 2019.

IBM expects to expand both its gross and pre-tax margins in 2019.

For full-year 2019, IBM expects a GAAP tax rate of approximately 14% (excluding discrete items). The operating (non-GAAP) tax rate is projected to be around 11% to 12%, which represents a significant headwind of 3 to 4 points compared to the previous year.

IBM anticipates a 4-point currency headwind to its revenue growth in the first quarter of 2019, which is projected to be about two points worse than the impact experienced in the fourth quarter of 2018. However, the company expects a 1 to 2 point sequential improvement in revenue growth at constant currency from Q4 2018 to Q1 2019.