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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
International Business Machines Corporation | LSE:IBM | London | Ordinary Share | COM STK USD0.20 (CDI) |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 118.95 | 2,648 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Computer Communication Equip | 61.86B | 7.5B | 8.1833 | 22.37 | 167.86B |
TIDMIBM
IBM (NYSE:IBM)
Highlights
-- Diluted EPS from continuing operations: GAAP of $2.92; Operating
(non-GAAP) of $3.30
-- Revenue of $19.2 billion -- Strategic imperatives revenue of $34.9 billion over the trailing 12
months, up 10 percent; represents 45 percent of IBM revenue--
Third-quarter revenue up 11 percent (up 10 percent adjusting for
currency)
-- Cloud revenue of $15.8 billion over the trailing 12 months, up 25
percent year to year (up 26 percent adjusting for currency)--
As-a-service annual exit run rate of $9.4 billion in the quarter, up
25 percent year to year (up 24 percent adjusting for currency)
-- Maintains full-year EPS and free cash flow expectations
IBM (NYSE:IBM) today announced third-quarter earnings results.
"In the third quarter we achieved double-digit growth in our strategic imperatives, extended our enterprise cloud leadership, and expanded our cognitive solutions business," said Ginni Rometty, IBM chairman, president and chief executive officer. "There was enthusiastic adoption of IBM's new z Systems mainframe, which delivers breakthrough security capabilities to our clients.
THIRD QUARTER 2017 Gross Profit Diluted EPS Net Income Margin GAAP from Continuing Operations $2.92 $2.7B 45.9% Year/Year -2% -4% -0.9Pts Operating (Non-GAAP) $3.30 $3.1B 47.6% Year/Year 0% -2% -0.4Pts As-a-service Strategic annual exit REVENUE Total IBM Imperatives Cloud run rate As reported (US$) $19.2B $8.8B $4.1B $9.4B Year/Year 0% 11% 20% 25% Year/Year adjusting for currency -1% 10% 20% 24%
"During the first three quarters of the year, our strong free cash flow has enabled us to maintain our R&D investments and to expand IBM's cloud and cognitive capabilities through capital investments," said Martin Schroeter, IBM senior vice president and chief financial officer. "In addition, we have returned nearly $8 billion to shareholders through dividends and share repurchases."
Strategic Imperatives Revenue
Third-quarter cloud revenues increased 20 percent to $4.1 billion. Cloud revenue over the last 12 months was $15.8 billion, including $8.8 billion delivered as-a-service and $7.0 billion for hardware, software and services to enable IBM clients to implement comprehensive cloud solutions. The annual exit run rate for as-a-service revenue increased to $9.4 billion from $7.5 billion in the third quarter of 2016. In the quarter, revenues from analytics increased 5 percent. Revenues from mobile increased 7 percent and revenues from security increased 51 percent (up 49 percent adjusting for currency).
Full-Year 2017 Expectations
The company continues to expect operating (non-GAAP) diluted earnings per share of at least $13.80 and GAAP diluted earnings per share of at least $11.95. Operating (non-GAAP) diluted earnings per share exclude $1.85 per share of charges for amortization of purchased intangible assets, other acquisition-related charges and retirement-related charges. IBM continues to expect free cash flow to be relatively flat year to year.
Cash Flow and Balance Sheet
In the third quarter, the company generated net cash from operating activities of $3.6 billion, or $3.3 billion excluding Global Financing receivables. IBM's free cash flow was $2.5 billion. IBM returned $1.4 billion in dividends and $0.9 billion of gross share repurchases to shareholders. At the end of September 2017, IBM had $1.5 billion remaining in the current share repurchase authorization.
IBM ended the third quarter of 2017 with $11.5 billion of cash on hand. Debt totaled $45.6 billion, including Global Financing debt of $29.4 billion. The balance sheet remains strong and is well positioned over the long term.
Segment Results for Third Quarter
-- Cognitive Solutions (includes solutions software and transaction
processing software) -- revenues of $4.4 billion, up 4 percent (up
3 percent adjusting for currency), driven by solutions software,
including security and analytics, and transaction processing software.
-- Global Business Services (includes consulting, global process
services and application management) -- revenues of $4.1 billion,
down 2 percent. Strategic imperatives revenue grew 10 percent led by
the cloud practice.
-- Technology Services & Cloud Platforms (includes
infrastructure services, technical support services and integration
software) -- revenues of $8.5 billion, down 3 percent (down 4
percent adjusting for currency). Strategic imperatives revenue grew 12
percent, driven by hybrid cloud services, security and mobile.
-- Systems (includes systems hardware and operating systems software)
-- revenues of $1.7 billion, up 10 percent, driven by growth in z
Systems and storage.
-- Global Financing (includes financing and used equipment sales) --
revenues of $427 million, up 4 percent (up 3 percent adjusting for
currency).
Expense and Other Income
Third-quarter GAAP expense and other income year-to-year performance reflects lower IP income of $221 million, an impact of $105 million year to year related to several commercial disputes and a benefit of $91 million resulting from the favorable resolution of pension-related litigation in the U.K.
Operating (non-GAAP) expense and other income for the third quarter of 2017 compared to 2016 reflects lower IP income of $221 million and an impact of $105 million year to year related to several commercial disputes.
Tax Rate
IBM's third-quarter effective GAAP and operating (non-GAAP) tax rates were 11.0 percent and 14.7 percent, respectively. The company continues to expect a full-year effective operating (non-GAAP) tax rate of 15 percent, plus or minus 3 points, excluding discrete items.
Year-To-Date 2017 Results
Consolidated diluted earnings per share were $7.24 compared to $7.67, down 6 percent year to year. Consolidated net income was $6.8 billion compared to $7.4 billion in the year-ago period, a decrease of 8 percent. Revenues from continuing operations for the nine-month period totaled $56.6 billion, a decrease of 3 percent year to year (decrease of 2 percent adjusting for currency) compared with $58.1 billion for the first nine months of 2016.
Operating (non-GAAP) diluted earnings per share from continuing operations were $8.64 compared with $8.59 per diluted share for the 2016 period, an increase of 1 percent. Operating (non-GAAP) net income for the nine months ended September 30, 2017 was $8.1 billion compared with $8.3 billion in the year-ago period, a decrease of 2 percent.
Forward-Looking and Cautionary Statements
Except for the historical information and discussions contained herein, statements contained in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on the company's current assumptions regarding future business and financial performance. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, including the following: a downturn in economic environment and client spending budgets; the company's failure to meet growth and productivity objectives, a failure of the company's innovation initiatives; risks from investing in growth opportunities; failure of the company's intellectual property portfolio to prevent competitive offerings and the failure of the company to obtain necessary licenses; cybersecurity and data privacy considerations; fluctuations in financial results, impact of local legal, economic, political and health conditions; adverse effects from environmental matters, tax matters and the company's pension plans; ineffective internal controls; the company's use of accounting estimates; the company's ability to attract and retain key personnel and its reliance on critical skills; impacts of relationships with critical suppliers; product quality issues; impacts of business with government clients; currency fluctuations and customer financing risks; impact of changes in market liquidity conditions and customer credit risk on receivables; reliance on third party distribution channels and ecosystems; the company's ability to successfully manage acquisitions, alliances and dispositions; risks from legal proceedings; risk factors related to IBM securities; and other risks, uncertainties and factors discussed in the company's Form 10-Qs, Form 10-K and in the company's other filings with the U.S. Securities and Exchange Commission (SEC) or in materials incorporated therein by reference. Any forward-looking statement in this release speaks only as of the date on which it is made. The company assumes no obligation to update or revise any forward-looking statements.
Presentation of Information in this Press Release
In an effort to provide investors with additional information regarding the company's results as determined by generally accepted accounting principles (GAAP), the company has also disclosed in this press release the following non-GAAP information which management believes provides useful information to investors:
IBM results --
-- presenting operating (non-GAAP) earnings per share amounts and related
income statement items;
-- adjusting for free cash flow; -- adjusting for currency (i.e., at constant currency).
Free cash flow guidance is derived using an estimate of profit, working capital and operational cash outflows. The company views Global Financing receivables as a profit-generating investment, which it seeks to maximize and therefore it is not considered when formulating guidance for free cash flow. As a result, the company does not estimate a GAAP Net Cash from Operations expectation metric.
The rationale for management's use of these non-GAAP measures is included in Exhibit 99.2 in the Form 8-K that includes this press release and is being submitted today to the SEC.
Conference Call and Webcast
IBM's regular quarterly earnings conference call is scheduled to begin at 5:00 p.m. EDT, today. The Webcast may be accessed via a link at http://www.ibm.com/investor/events/earnings/3q17.html. Presentation charts will be available shortly before the Webcast.
Financial Results Below (certain amounts may not add due to use of rounded numbers; percentages presented are calculated from the underlying whole-dollar amounts).
INTERNATIONAL BUSINESS MACHINES CORPORATION COMPARATIVE FINANCIAL RESULTS (Unaudited; Dollars in millions except per share amounts) Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 REVENUE Cognitive Solutions $ 4,400 $ 4,235 $ 13,021 $ 12,889 Global Business 4,093 4,191 12,196 12,578 Services Technology Services 8,457 8,748 25,079 26,029 & Cloud Platforms Systems 1,721 1,558 4,863 5,184 Global Financing 427 412 1,246 1,245 Other 56 81 192 223 TOTAL REVENUE 19,153 19,226 56,597 58,149 GROSS PROFIT 8,800 9,013 25,365 27,401 GROSS PROFIT MARGIN Cognitive Solutions 78.7 % 80.4 % 78.4 % 81.5 % Global Business 27.3 % 28.8 % 25.3 % 27.0 % Services Technology Services 41.1 % 42.0 % 40.2 % 41.5 % & Cloud Platforms Systems 53.6 % 51.1 % 51.5 % 55.1 % Global Financing 25.2 % 37.8 % 29.2 % 39.6 % TOTAL GROSS PROFIT 45.9 % 46.9 % 44.8 % 47.1 % MARGIN EXPENSE AND OTHER INCOME S,G&A 4,648 4,732 14,959 16,093 R,D&E 1,342 1,397 4,360 4,320 Intellectual property and custom development (308 ) (528 ) (1,118 ) (1,110 ) income Other (income) (114 ) (8 ) (218 ) 281 and expense Interest expense 168 158 451 473 TOTAL EXPENSE AND 5,735 5,751 18,434 20,056 OTHER INCOME INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 3,065 3,263 6,931 7,345 Pre-tax margin 16.0 % 17.0 % 12.2 % 12.6 % Provision for 339 409 120 (31 ) / (Benefit from) income taxes Effective tax rate 11.0 % 12.5 % 1.7 % (0.4 %) INCOME FROM $ 2,726 $ 2,854 $ 6,811 $ 7,375 CONTINUING OPERATIONS DISCONTINUED OPERATIONS Income/(Loss) from (0 ) (1 ) (3 ) (4 ) discontinued operations, net of taxes NET INCOME $ 2,726 $ 2,853 $ 6,807 $ 7,371 EARNINGS PER SHARE OF COMMON STOCK: Assuming Dilution Continuing Operations $ 2.92 $ 2.98 $ 7.24 $ 7.67 Discontinued $ 0.00 $ 0.00 $ 0.00 $ 0.00 Operations TOTAL $ 2.92 $ 2.98 $ 7.24 $ 7.67 Basic Continuing Operations $ 2.93 $ 2.99 $ 7.28 $ 7.70 Discontinued $ 0.00 $ 0.00 $ 0.00 $ 0.00 Operations TOTAL $ 2.93 $ 2.99 $ 7.28 $ 7.70 WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (M's): Assuming Dilution 933.2 957.3 940.2 960.7 Basic 929.4 954.0 935.6 957.7 INTERNATIONAL BUSINESS MACHINES CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) At At (Dollars in Millions) September 30, December 31, 2017 2016 ASSETS: Current Assets: Cash and cash equivalents $ 10,915 $ 7,826 Marketable securities 600 701 Notes and accounts receivable 8,150 9,182 - trade, net Short-term financing receivables, net 18,050 19,006 Other accounts receivable, net 926 1,057 Inventory 1,711 1,553 Prepaid expenses and 4,389 4,564 other current assets Total Current Assets 44,742 43,888 Property, plant and equipment, net 11,057 10,830 Long-term financing receivables, net 8,459 9,021 Prepaid pension assets 4,521 3,034 Deferred taxes 7,289 5,224 Goodwill and intangibles, net 40,763 40,887 Investments and sundry assets 4,806 4,585 Total Assets $ 121,636 $ 117,470 LIABILITIES: Current Liabilities: Taxes $ 3,038 $ 3,235 Short-term debt 4,299 7,513 Accounts payable 5,442 6,209 Deferred income 10,649 11,035 Other liabilities 8,270 8,283 Total Current Liabilities 31,697 36,275 Long-term debt 41,327 34,655 Retirement related obligations 17,554 17,070 Deferred income 3,579 3,600 Other liabilities 7,723 7,477 Total Liabilities 101,879 99,078 EQUITY: IBM Stockholders' Equity: Common stock 54,395 53,935 Retained earnings 155,565 152,759 Treasury stock -- at cost (162,812 ) (159,050 ) Accumulated other comprehensive (27,521 ) (29,398 ) income/(loss) Total IBM stockholders' equity 19,627 18,246 Noncontrolling interests 130 146 Total Equity 19,757 18,392 Total Liabilities and Equity $ 121,636 $ 117,470 INTERNATIONAL BUSINESS MACHINES CORPORATION CASH FLOW ANALYSIS (Unaudited) Three Months Ended Nine Months Ended (Dollars September 30, September 30, in Millions) 2017 2016 2017 2016 Net Cash $ 3,570 $ 4,118 * ** $ 10,991 $ 13,105 * ** Provided by Operating Activities per GAAP: Less: change in Global Financing (GF) Receivables 258 835 * 2,468 3,336 * Capital (780 ) (851 ) (2,347 ) (2,801 ) Expenditures, Net Free Cash 2,532 2,431 ** 6,176 6,969 ** Flow Acquisitions (274 ) (40 ) (442 ) (5,445 ) Divestitures 6 0 35 35 Dividends (1,396 ) (1,337 ) (4,119 ) (3,927 ) Share (949 ) (856 ) (3,674 ) (2,632 ) Repurchase Non-GF (467 ) (1,696 ) 1,896 3,365 Debt Other (233 ) 850 * ** 3,117 3,408 * ** (includes GF Receivables and GF Debt) Change in Cash, Cash Equivalents and Short-term ($780 ) ($648 ) $ 2,988 $ 1,773 Marketable Securities * Revised classification of certain financing receivables. ** Reclassified to reflect adoption of the FASB guidance on stock-based compensation. INTERNATIONAL BUSINESS MACHINES CORPORATION CASH FLOW (Unaudited) Three Months Ended Nine Months Ended (Dollars in September 30, September 30, Millions) 2017 2016 2017 2016 Net Income from $ 2,726 $ 2,853 $ 6,807 $ 7,371 Operations Depreciation/Amortization 1,175 1,126 3,392 3,253 of Intangibles Stock-based 123 142 388 403 Compensation Working Capital (713 ) (839 ) ** (2,064 ) (1,258 ) ** / Other Global Financing A/R 258 835 * 2,468 3,336 * Net Cash Provided by $ 3,570 $ 4,118 * ** $ 10,991 $ 13,105 * ** Operating Activities Capital (780 ) (851 ) (2,347 ) (2,801 ) Expenditures, net of payments & proceeds Divestitures, net of 6 - 35 35 cash transferred Acquisitions, net (274 ) (40 ) (442 ) (5,445 ) of cash acquired Marketable (875 ) (60 ) * (523 ) 921 * Securities / Other Investments, net Net Cash Used ($1,923 ) ($951 ) * ($3,278 ) ($7,289 ) *
in Investing Activities Debt, net of (446 ) (2,041 ) 2,310 1,888 payments & proceeds Dividends (1,396 ) (1,337 ) (4,119 ) (3,927 ) Common Stock (949 ) (856 ) (3,674 ) (2,632 ) Repurchases Common Stock 35 49 ** (15 ) 52 ** Transactions - Other Net Cash Used ($2,756 ) ($4,185 ) ** ($5,499 ) ($4,619 ) ** in Financing Activities Effect of Exchange 328 41 875 155 Rate changes on Cash Net Change in Cash ($781 ) ($978 ) $ 3,089 $ 1,352 & Cash Equivalents * Revised classification of certain financing receivables. ** Reclassified to reflect adoption of the FASB guidance on stock-based compensation. INTERNATIONAL BUSINESS MACHINES CORPORATION SEGMENT DATA (Unaudited) THIRD - QUARTER 2017 Cognitive Solutions & Industry Services Technology Global Services & (Dollars Cognitive Business Cloud Global in Millions) Solutions Services Platforms Systems Financing Revenue External $ 4,400 $ 4,093 $ 8,457 $ 1,721 $ 427 Internal 629 92 164 227 272 Total $ 5,030 $ 4,185 $ 8,621 $ 1,948 $ 698 Segment Revenue Pre-tax 1,649 453 1,192 339 244 Income from Continuing Operations Pre-tax 32.8 % 10.8 % 13.8 % 17.4 % 34.9 % margin Change 3.9 % (2.3 )% (3.3 )% 10.4 % 3.7 % YTY Revenue - External Change 3.0 % (2.2 )% (4.1 )% 9.6 % 2.8 % YTY Revenue - External @constant currency THIRD - QUARTER 2016 Cognitive Solutions & Industry Services Technology Global Services & (Dollars Cognitive Business Cloud Global in Millions) Solutions Services Platforms Systems Financing Revenue External $ 4,235 $ 4,191 $ 8,748 $ 1,558 $ 412 Internal 667 93 180 176 352 Total $ 4,902 $ 4,284 $ 8,929 $ 1,734 $ 763 Segment Revenue Pre-tax 1,574 544 1,288 136 355 Income from Continuing Operations Pre-tax 32.1 % 12.7 % 14.4 % 7.8 % 46.5 % margin INTERNATIONAL BUSINESS MACHINES CORPORATION SEGMENT DATA (Unaudited) NINE - MONTHS 2017 Cognitive Solutions & Industry Services Technology Global Services & (Dollars Cognitive Business Cloud Global in Millions) Solutions Services Platforms Systems Financing Revenue External $ 13,021 $ 12,196 $ 25,079 $ 4,863 $ 1,246 Internal 2,001 271 497 571 925 Total $ 15,022 $ 12,467 $ 25,576 $ 5,434 $ 2,171 Segment Revenue Pre-tax 4,539 1,065 2,888 227 836 Income from Continuing Operations Pre-tax 30.2 % 8.5 % 11.3 % 4.2 % 38.5 % margin Change 1.0 % (3.0 )% (3.7 )% (6.2 )% 0.1 % YTY Revenue - External Change 1.3 % (1.9 )% (3.3 )% (5.9 )% (0.4 )% YTY Revenue - External @constant currency NINE - MONTHS 2016 Cognitive Solutions & Industry Services Technology Global Services & (Dollars Cognitive Business Cloud Global in Millions) Solutions Services Platforms Systems Financing Revenue External $ 12,889 $ 12,578 $ 26,029 $ 5,184 $ 1,245 Internal 1,929 310 501 594 1,340 Total $ 14,818 $ 12,888 $ 26,530 $ 5,778 $ 2,585 Segment Revenue Pre-tax 4,039 1,210 2,825 354 1,208 Income from Continuing Operations Pre-tax 27.3 % 9.4 % 10.6 % 6.1 % 46.7 % margin INTERNATIONAL BUSINESS MACHINES CORPORATION U.S. GAAP TO OPERATING (Non-GAAP) RESULTS RECONCILIATION (Unaudited; Dollars in millions except per share amounts) THIRD - QUARTER 2017 CONTINUING OPERATIONS Acquisition- Retirement- Related Related Operating GAAP Adjustments* Adjustments** (Non-GAAP) Gross Profit $ 8,800 $ 114 $ 203 $ 9,116 Gross Profit 45.9 % 0.6Pts 1.1Pts 47.6 % Margin S,G&A 4,648 (125 ) (53 ) 4,470 R,D&E 1,342 - (51 ) 1,291 Other (Income) (114 ) 0 - (114 ) & Expense Total Expense & 5,735 (125 ) (103 ) 5,507 Other (Income) Pre-tax Income 3,065 238 306 3,609 from Continuing Operations Pre-tax Income 16.0 % 1.2Pts 1.6Pts 18.8 % Margin from Continuing Operations Provision for 339 79 113 531 / (Benefit from) Income Taxes*** Effective 11.0 % 1.5Pts 2.2Pts 14.7 % Tax Rate Income from 2,726 159 193 3,079 Continuing Operations Income Margin 14.2 % 0.8Pts 1.0Pts 16.1 % from Continuing Operations Diluted Earnings $ 2.92 $ 0.17 $ 0.21 $ 3.30 Per Share: Continuing Operations THIRD - QUARTER 2016 CONTINUING OPERATIONS Acquisition- Retirement- Related Related Operating GAAP Adjustments* Adjustments** (Non-GAAP) Gross Profit $ 9,013 $ 129 $ 79 $ 9,221 Gross Profit 46.9 % 0.7Pts 0.4Pts 48.0 % Margin S,G&A 4,732 (138 ) (53 ) 4,541 R,D&E 1,397 - (7 ) 1,390 Other (Income) (8 ) (2 ) - (10 ) & Expense Total Expense & 5,751 (140 ) (60 ) 5,550 Other (Income) Pre-tax Income 3,263 269 139 3,671 from Continuing Operations Pre-tax Income 17.0 % 1.4Pts 0.7Pts 19.1 % Margin from Continuing Operations Provision for 409 73 40 521 / (Benefit from) Income Taxes*** Effective 12.5 % 1.1Pts 0.6Pts 14.2 % Tax Rate Income from 2,854 197 99 3,149 Continuing Operations Income Margin 14.8 % 1.0Pts 0.5Pts 16.4 % from Continuing Operations Diluted Earnings $ 2.98 $ 0.21 $ 0.10 $ 3.29 Per Share: Continuing Operations * Includes amortization of purchased intangible assets, in process R&D, severance cost for acquired employees, vacant space for acquired companies, deal costs and acquisition integration tax charges. ** Includes retirement-related interest cost, expected return on plan assets, recognized actuarial losses or gains, amortization of transition assets, other settlements, curtailments, multi-employer plans and insolvency insurance. *** Tax impact on operating (non-GAAP) pre-tax income from continuing operations is calculated under the same accounting principles applied to the As Reported pre-tax income under ASC 740, which employs an annual effective tax rate method to the results. INTERNATIONAL BUSINESS MACHINES CORPORATION U.S. GAAP TO OPERATING (Non-GAAP) RESULTS RECONCILIATION (Unaudited; Dollars in millions except per share amounts) NINE - MONTHS 2017 CONTINUING OPERATIONS Acquisition- Retirement- Related Related Operating GAAP Adjustments* Adjustments** (Non-GAAP) Gross $ 25,365 $ 349 $ 591 $ 26,305 Profit Gross 44.8 % 0.6Pts 1.0Pts 46.5 % Profit Margin S,G&A 14,959 (393 ) (326 ) 14,240 R,D&E 4,360 - (148 ) 4,212 Other (218 ) (7 ) - (225 ) (Income) & Expense Total Expense 18,434 (401 ) (474 ) 17,559 & Other (Income) Pre-tax 6,931 750 1,065 8,746 Income from Continuing Operations Pre-tax 12.2 % 1.3Pts 1.9Pts 15.5 % Income Margin from Continuing Operations
Provision 120 212 288 621 for / (Benefit from) Income Taxes*** Effective 1.7 % 2.3Pts 3.1Pts 7.1 % Tax Rate Income from 6,811 537 777 8,125 Continuing Operations Income 12.0 % 0.9Pts 1.4Pts 14.4 % Margin from Continuing Operations Diluted $ 7.24 $ 0.57 $ 0.83 $ 8.64 Earnings Per Share: Continuing Operations NINE - MONTHS 2016 CONTINUING OPERATIONS Acquisition- Retirement- Related Related Operating GAAP Adjustments* Adjustments** (Non-GAAP) Gross $ 27,401 $ 371 $ 238 $ 28,010 Profit Gross 47.1 % 0.6Pts 0.4Pts 48.2 % Profit Margin S,G&A 16,093 (365 ) (183 ) 15,545 R,D&E 4,320 - (23 ) 4,297 Other 281 (7 ) - 274 (Income) & Expense Total Expense 20,056 (372 ) (206 ) 19,478 & Other (Income) Pre-Tax 7,345 743 444 8,532 Income from Continuing Operations Pre-tax 12.6 % 1.3Pts 0.8Pts 14.7 % Income Margin from Continuing Operations Provision (31 ) 201 106 277 for / (Benefit from) Income Taxes*** Effective (0.4 )% 2.4Pts 1.3Pts 3.2 % Tax Rate Income from 7,375 542 338 8,255 Continuing Operations Income 12.7 % 0.9Pts 0.6Pts 14.2 % Margin from Continuing Operations Diluted $ 7.67 $ 0.57 $ 0.35 $ 8.59 Earnings Per Share: Continuing Operations * Includes amortization of purchased intangible assets, in process R&D, severance cost for acquired employees, vacant space for acquired companies, deal costs and acquisition integration tax charges. ** Includes retirement-related interest cost, expected return on plan assets, recognized actuarial losses or gains, amortization of transition assets, other settlements, curtailments, multi-employer plans and insolvency insurance. *** Tax impact on operating (non-GAAP) pre-tax income from continuing operations is calculated under the same accounting principles applied to the As Reported pre-tax income under ASC 740, which employs an annual effective tax rate method to the results. INTERNATIONAL BUSINESS MACHINES CORPORATION RECONCILIATION OF OPERATING EARNINGS PER SHARE (Unaudited) 2017 EPS Guidance Expectations IBM GAAP EPS at least $11.95 IBM Operating EPS (non-GAAP) at least $13.80 Adjustments Acquisition-related charges * $0.75 Non-Operating Retirement-Related Items $1.10 * Includes acquisitions through September 30, 2017
IBMIan Colley, 914-434-3043colley@us.ibm.comorJohn Bukovinsky, 732-618-3531jbuko@us.ibm.com
View source version on businesswire.com: http://www.businesswire.com/news/home/20171017006759/en/
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October 18, 2017 02:00 ET (06:00 GMT)
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