IBM Q4 2012 Profits Up 6 Percent on Software, Hardware
IBM announced a 6 percent increase in net income for its fourth quarter of 2012, driven by software, hardware and growth initiatives.IBM announced fourth-quarter 2012 net income of $5.8 billion compared with $5.5 billion in the fourth quarter of 2011, an increase of 6 percent. Big Blue's total revenues for the fourth quarter of 2012 were $29.3 billion, a decrease of 1 percent from the fourth quarter of 2011. However, without the impact of IBM’s divested Retail Store Solutions (RSS) business, revenue increased 1 percent, the company reported. Net income for the year ending Dec. 31, 2012, was $16.6 billion compared with $15.9 billion in the prior year, an increase of 5 percent. And revenues for 2012 totaled $104.5 billion, a decrease of 2 percent, compared with $106.9 billion in 2011. IBM's fourth-quarter profits were driven by software, hardware and sales to growth markets. Services income was basically flat.
"We achieved record profit, earnings per share and free cash flow in 2012," said Ginni Rometty, IBM chairman, president and chief executive officer, in a statement. "Our performance in the fourth quarter and for the full year was driven by our strategic growth initiatives—growth markets, analytics, cloud computing, Smarter Planet solutions—which support our continued shift to higher-value businesses. Looking ahead, we continue to invest to deliver innovations for the enterprise in key areas such as big data, mobile solutions, social business and security, while expanding into new markets and reaching new clients. We are well on track toward our long-term road map for operating EPS [earnings per share] of at least $20 in 2015."
Revenue from Power Systems decreased 19 percent compared with the 2011 period. Revenue from System x decreased 2 percent, and that of System Storage decreased 5 percent. Revenue from Retail Store Solutions dropped $239 million year over year as a result of the divestiture in the third quarter, and revenue from Microelectronics OEM increased 4 percent. Meanwhile, revenue from the company's growth markets increased 7 percent. Revenues in Brazil, Russia, India and China—the BRIC countries—increased 11 percent, Loughridge said. Meanwhile, IBM's Global Technology Services segment revenue decreased 2 percent to $10.3 billion, and IBM's Global Business Services segment revenue was down 3 percent at $4.7 billion. The estimated services backlog as of Dec. 31 was $140 billion.