IBM Submits Q1 Report

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IBM just announced its first quarter earnings report for 2012, with a net income of $3.1 billion, up 7% from $2.9 billion from Q1, 2011. Total revenue was $24.7 billion, up only 1% from last year.

Diluted earnings were up $0.30 from 2011 at $2.61 per share, and operating (non-GAAP) diluted earnings were $2.78 per share, up 15% from $2.41. Regionally, Q1 revenues in the Americas was $10.5 billion, at the same increase of 1% up from 2011, revenues for Europe/Middle East/Africa were $7.6 billion, down 2%, and Asia-Pacific revenues increased 4% at $6.1 billion. OEM revenues came in at $509 million, a 17% drop from Q1 of last year. Revenues from IBM's growth markets was up 9% across the board, with 40 countries coming in at at least 10% - BRIC countries - Brazil, Russia, India and China all increased by 10%

As a whole, IBM services and software were up in revenue at $10 billion (a 2% increase) and $5.6 billion (a 5% increase) respectively. Though, hardware and financing sectors were down in revenue, $3.7 billion (down 7%) and $490 million (down 4%) respectively.

Ginni Rometty, IBM president and chief executive officer, states, "In the first quarter, we drove strong profit and earnings per share growth. We delivered another excellent software performance, expanded services margins, and continued the momentum in our growth initiatives. Our investments in growth market countries continued to generate strong revenue growth across software, hardware and services while contributing to the company's ongoing margin expansion. Based on this performance, we are raising our 2012 full-year operating earnings per share expectations to at least $15.00."

Below is a general report:

Diluted EPS:
GAAP: $2.61, up 13 percent;
Operating (non-GAAP): $2.78, up 15 percent;
Net income:
GAAP: $3.1 billion, up 7 percent;
Operating (non-GAAP): $3.3 billion, up 9 percent;
Gross profit margin:
GAAP: 45.1 percent, up 0.9 points;
Operating (non-GAAP): 45.7 percent, up 1.2 points;
Revenue: $24.7 billion, flat, up 1 percent adjusting for currency;
Free cash flow of $1.9 billion, up $1.1 billion;
Software revenue up 5 percent, 7 percent adjusting for currency;
Services revenue up 1 percent:
Services pre-tax income up 11 percent;
Services backlog of $139 billion, down 2 percent, up 1 percent adjusting for currency;
Systems and Technology revenue down 7 percent, 6 percent adjusting for currency;
Growth markets revenue up 9 percent;
Business analytics revenue up 14 percent;
Smarter Planet revenue up more than 25 percent;
Cloud revenue doubled first-quarter 2011 revenue;
Full-year 2012 operating (non-GAAP) EPS expectations raised to at least $15.00 from at least $14.85.

It was recently reported that IBM was tapped to handle all the data from Square Kilometre Array radio telescope that is being built, which will produce an exabyte of data daily. The company's Jeopardy-winning 'Watson' supercomputer was also "hired" by Citigroup to crunch numbers on Wall Street. Perhaps this sort of outsourcing has contributing to the increase in IBM's software and services revenues.

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