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IBM Closes Fiscal Year

ARMONK, N.Y. — Fourth-Quarter 2010:

• Diluted earnings per share of $4.18, up 16 percent;
• Record revenue of $29.0 billion, up 7 percent as reported and adjusting for currency;
• Record net income of $5.3 billion, up 9 percent;
• Pre-tax income of $7 billion, up 9 percent;
• Gross profit margin of 49 percent, up 0.8 points;
• Software revenue excluding divested PLM operations up 11 percent, 12 percent adjusting for currency; 7 percent including PLM;
• Systems and Technology revenue up 21 percent, 22 percent adjusting for currency;
• System z mainframe revenue up 69 percent; MIPS up 58 percent;
• Services revenue up 2 percent as reported and adjusting for currency;
• Services backlog of $142 billion, up $5 billion year over year and up $8 billion quarter to quarter;
• Growth markets revenue up 15 percent, 13 percent adjusting for currency;
• Business analytics revenue up 19 percent;
• Free cash flow of $8.7 billion, up $1.5 billion. Full-Year 2010:
• Diluted earnings per share of $11.52, up 15 percent and $0.52 ahead of high end of 2010 roadmap; 8th consecutive year of double-digit EPS growth;
• Revenue of $99.9 billion, up 4 percent, up 3 percent adjusting for currency; up 5 percent, 4 percent adjusting for currency, excluding PLM operations;
• Record net income of $14.8 billion, up 10 percent;
• Record free cash flow of $16.3 billion, up $1.2 billion;
• Gross profit margin of 46.1 percent, 7th consecutive year of increase.

Full-Year 2011:

• Expect GAAP EPS of at least $12.56 and operating (non-GAAP) EPS of at least $13.00, on track for 2015 roadmap.

IBM (NYSE: IBM) today announced fourth-quarter 2010 diluted earnings of $4.18 per share, compared with diluted earnings of $3.59 per share in the fourth quarter of 2009, an increase of 16 percent. Fourth-quarter net income was $5.3 billion compared with $4.8 billion in the fourth quarter of 2009, an increase of 9 percent. Total revenues for the fourth quarter of 2010 of $29.0 billion increased 7 percent (7 percent, adjusting for currency) from the fourth quarter of 2009.

“We completed an outstanding year, with record profit and free cash flow, and exceeded the high end of our 2010 earnings per share roadmap objective,” said Samuel J. Palmisano, IBM chairman, president and chief executive officer. “We also capped a decade in which our shift to high-value businesses, our global integration of IBM, our investment in research and development of almost $60 billion and our acquisition of 116 companies have helped us to nearly triple our EPS and return more than $100 billion to shareholders.

“As IBM enters its second century, we will continue to focus on our long-term strategic initiatives — growth markets, Smarter Planet Solutions, cloud and business analytics — as we drive to achieve our new roadmap target of operating earnings per share of at least $20 in 2015.”

{complink 2470|IBM Corp.}

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