IBM Earnings: Profit Rises for Third Straight Quarter

S&P 500 (NYSE:SPY) component International Business Machines Corporation (NYSE:IBM) reported its results for the fourth quarter. IBM creates integrated solutions that leverage information technology and a deep knowledge of business processes for clients.

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International Business Machines Earnings Cheat Sheet for the Fourth Quarter.

Results: Net income for the diversified computer systems company rose to $5.49 billion ($4.62 per share) vs. $5.26 billion ($4.18 per share) in the same quarter a year earlier. This marks a rise of 4.4% from the year earlier quarter.

Revenue: Rose 1.6% to $29.49 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: IBM reported adjusted net income of $4.71 per share. By that measure, the company beat the mean estimate of $4.62 per share. Analysts were expecting revenue of $29.74 billion.

Quoting Management: “We had a strong fourth-quarter performance, capping a year of record earnings per share, revenue, profit and free cash flow,” said Ginni Rometty, IBM president and chief executive officer. “We delivered outstanding results in all four of our strategic initiatives for the quarter and the year, as we continued to realize the benefit of our long-term investments in growth markets, business analytics, Smarter Planet solutions and cloud. We are well on track toward our long-term roadmap for operating earnings per share of at least $20 in 2015.”

Key Stats:

The company has now seen net income rise in three straight quarters. In the third quarter, net income rose 7% and in the second quarter, the figure rose 8.2%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 6 cents in the third quarter, by 8 cents in the second quarter, and by 2 cents in the first quarter.

Revenue has risen the past four quarters. Revenue increased 7.8% to $26.16 billion in the third quarter. The figure rose 12.4% in the second quarter from the year earlier and climbed 7.7% in the first quarter from the year-ago quarter.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the first quarter of the next fiscal year has moved down from $2.68 a share to $2.66 over the last thirty days. For the fiscal year, the average estimate has moved down from $13.38 a share to $13.37 over the last ninety days.

Competitors to Watch: Oracle Corporation (NASDAQ:ORCL), Hewlett-Packard Company (NYSE:HPQ), Microsoft Corporation (NASDAQ:MSFT), Cisco Systems, Inc. (NASDAQ:CSCO), Intel Corporation (NASDAQ:INTC), Dell Inc. (NASDAQ:DELL), Apple Inc. (NASDAQ:AAPL), EMC Corporation (NYSE:EMC), SAP AG (NYSE:SAP), and Sybase, Inc. (SY).

Stock Performance: Shares of IBM were down 0.3% from the previous close.

Investing Insights: Will the iPad 3 Be the Next Catalyst for Apple’s Stock?

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

 

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com