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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 | 1,204 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Computer Communication Equip | 61.86B | 7.5B | 8.1833 | 22.26 | 167.01B |
TIDMIBM
IBM (NYSE:IBM)
Revenue Up 4 Percent Year to Year; Strong Profit Performance
Highlights
Hot Features
Premium
-- GAAP EPS from continuing operations of $2.61; Operating (non-GAAP) EPS
of $3.08; both up 5 percent
-- GAAP Pre-tax income up 14 percent; Operating (non-GAAP) pre-tax income
up 11 percent-- Pre-tax margins expanded more than 100
basis points year to year
-- Revenue of $20.0 billion, up 4 percent (up 2 percent adjusting for
currency)
-- Strategic imperatives revenue of $39.0 billion over last 12 months, up
15 percent (up 12 percent adjusting for currency); represents 48
percent of IBM revenue
-- Cloud revenue of $18.5 billion over last 12 months, up 23 percent (up
20 percent adjusting for currency)
-- As-a-service annual exit run rate for cloud revenue of $11.1 billion
in the quarter, up 26 percent year to year (up 24 percent adjusting
for currency)
-- Maintains full-year operating (non-GAAP) EPS and free cash flow
expectations
IBM (NYSE:IBM) today announced second-quarter results.
"We delivered strong revenue and profit growth in the quarter, underscoring IBM's progress and momentum in the emerging, high-value segments of the IT industry," said Ginni Rometty, IBM chairman, president and chief executive officer. "More clients are engaging IBM on their journey to the cloud, and deploying IBM Cloud, Watson AI, analytics, blockchain and security solutions. This demonstrates IBM's unique leadership in providing innovative technology coupled with deep industry expertise, trust and security."
SECOND QUARTER 2018
Pre-tax Gross Profit
Diluted EPS Net Income Income Margin
GAAP from Continuing $2.61 $2.4B $2.8B 46.0%
Operations
Year/Year 5% 3% 14% (0.5)Pts
Operating (Non-GAAP) $3.08 $2.8B $3.4B 46.5%
Year/Year 5% 3% 11% (0.6)Pts
As-a-service
Strategic annual exit
REVENUE Total IBM Imperatives Cloud run rate
As reported (US$) $20.0B $10.1B $4.7B $11.1B
Year/Year 4% 15% 20% 26%
Year/Year adjusting 2% 13% 18% 24%
for currency
"We increased revenue, grew pre-tax income double digits and expanded pre-tax income margins year to year, while continuing to invest in the business and return capital to shareholders," said James Kavanaugh, IBM senior vice president and chief financial officer. "We remain focused on delivering consistent operational performance, in line with our longer-term model."
Strategic Imperatives Revenue
Strategic imperatives revenue over the last 12 months was $39.0 billion, up 15 percent (up 12 percent adjusting for currency). Total cloud revenue over the last 12 months was $18.5 billion, up 23 percent (up 20 percent adjusting for currency), with $8.2 billion from hardware, software and services to enable IBM clients to implement hybrid cloud solutions across public, private and multi-cloud environments, and $10.4 billion delivered as a service. The annual exit run rate for as-a-service revenue increased in the quarter to $11.1 billion, up 26 percent (up 24 percent adjusting for currency).
In the second quarter, revenues from analytics increased 7 percent to $5.4 billion (up 5 percent adjusting for currency); revenues from mobile increased 5 percent to $1.3 billion (up 3 percent adjusting for currency); and revenues from security increased 81 percent to $1.0 billion (up 79 percent adjusting for currency).
Cash Flow and Balance Sheet
In the second quarter, the company generated net cash from operating activities of $2.3 billion, or $2.9 billion, excluding Global Financing receivables. IBM's free cash flow was $1.9 billion. IBM returned $2.4 billion to shareholders through $1.4 billion in dividends and $1.0 billion in gross share repurchases. At the end of June 2018, IBM had $2.0 billion remaining in the current share repurchase authorization.
IBM ended the second quarter with $11.9 billion of cash on hand. Debt totaled $45.5 billion, including Global Financing debt of $31.1 billion. The balance sheet remains strong and is well positioned for the long term.
Segment Results for Second Quarter
-- Cognitive Solutions (includes solutions software and transaction
processing software) -- revenues of $4.6 billion, flat year to
year (down 1 percent adjusting for currency), with growth in analytics
and industry vertical solutions led by financial services and IoT.
-- Global Business Services (includes consulting, global process
services and application management) -- revenues of $4.2 billion,
up 2 percent (flat year to year adjusting for currency), with growth
in consulting driven by digital offerings.
-- Technology Services & Cloud Platforms (includes
infrastructure services, technical support services and integration
software) -- revenues of $8.6 billion, up 2 percent (flat year to
year adjusting for currency). Strategic imperatives revenue grew 26
percent, led by hybrid cloud services, security and mobile.
-- Systems (includes systems hardware and operating systems software)
-- revenues of $2.2 billion, up 25 percent (up 23 percent
adjusting for currency) driven by growth in IBM Z, Power Systems and
storage.
-- Global Financing (includes financing and used equipment sales) --
revenues of $394 million, down 5 percent (down 6 percent adjusting for
currency).
Full-Year 2018 Expectations
The company expects operating (non-GAAP) diluted earnings per share of at least $13.80 and GAAP diluted earnings per share of at least $11.60. Operating (non-GAAP) diluted earnings per share exclude $2.20 per share of charges for amortization of purchased intangible assets, other acquisition-related charges and retirement-related charges as well as impacts from the enactment of U.S. Tax Reform.
IBM expects free cash flow of approximately $12 billion, with a realization rate greater than 100 percent.
Year-To-Date 2018 Results
Consolidated diluted earnings per share were $4.43 compared to $4.32, up 3 percent year to year. Consolidated net income was $4.1 billion, flat year to year. Revenues from continuing operations for the six-month period totaled $39.1 billion, an increase of 4 percent year to year (up 1 percent adjusting for currency) compared with $37.4 billion for the first six months of 2017.
Operating (non-GAAP) diluted earnings per share from continuing operations was $5.53 compared with $5.28 per diluted share for the 2017 period, an increase of 5 percent. Operating (non-GAAP) net income for the six months ended June 30, 2018 was $5.1 billion compared with $5.0 billion in the year-ago period, an increase 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; damage to the company's reputation; 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 employees 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/2q18.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 Six Months Ended
June 30, June 30,
2018 2017 2018 2017
REVENUE
Cognitive Solutions $4,580 $4,559 $8,879 $8,621
Global Business Services 4,192 4,097 8,365 8,103
Technology Services 8,615 8,406 17,240 16,622
& Cloud Platforms
Systems 2,177 1,747 3,676 3,142
Global Financing 394 415 799 819
Other 45 65 114 136
TOTAL REVENUE 20,003 19,289 39,075 37,443
GROSS PROFIT 9,199 8,968 * 17,445 16,912 *
GROSS PROFIT MARGIN
Cognitive Solutions 77.7% 79.0% * 77.0% 78.2% *
Global Business Services 25.9% 24.7% * 24.6% 24.0% *
Technology Services 39.4% 40.4% * 38.8% 39.6% *
& Cloud Platforms
Systems 50.6% 52.7% * 47.8% 50.3% *
Global Financing 26.6% 30.8% * 30.6% 31.3% *
TOTAL GROSS PROFIT MARGIN 46.0% 46.5% * 44.6% 45.2% *
EXPENSE AND OTHER INCOME
S,G&A 4,857 5,033 * 10,302 10,060 *
R,D&E 1,364 1,436 * 2,769 2,921 *
Intellectual property and
custom development income (250) (365) (567) (810)
Other (income) and expense 280 273 * 692 592 *
Interest expense 173 147 338 283
TOTAL EXPENSE AND 6,423 6,525 * 13,534 13,046 *
OTHER INCOME
INCOME FROM CONTINUING
OPERATIONS
BEFORE INCOME TAXES 2,776 2,443 3,911 3,867
Pre-tax margin 13.9% 12.7% 10.0% 10.3%
Provision for / (Benefit 373 111 (166) (218)
from) income taxes
Effective tax rate 13.5% 4.5% (4.3%) (5.6%)
INCOME FROM CONTINUING $2,402 $2,332 $4,078 $4,085
OPERATIONS
DISCONTINUED OPERATIONS
Income/(Loss) from 1 (1) 5 (3)
discontinued
operations, net of taxes
NET INCOME $2,404 $2,331 $4,083 $4,082
EARNINGS PER SHARE
OF COMMON STOCK:
Assuming Dilution
Continuing Operations $2.61 $2.48 $4.42 $4.32
Discontinued Operations $0.00 $0.00 $0.01 $0.00
TOTAL $2.61 $2.48 $4.43 $4.32
Basic
Continuing Operations $2.63 $2.49 $4.44 $4.35
Discontinued Operations $0.00 $0.00 $0.01 $0.00
TOTAL $2.63 $2.49 $4.45 $4.35
WEIGHTED-AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING (M's):
Assuming Dilution 919.4 939.6 922.4 943.7
Basic 915.1 934.9 917.9 938.7
* Recast to reflect
adoption
of the FASB guidance
on presentation of
net benefit cost.
INTERNATIONAL BUSINESS
MACHINES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
At At
(Dollars in Millions) June 30, December 31,
2018 2017
ASSETS:
Current Assets:
Cash and cash equivalents $10,741 $11,972
Restricted cash 219 262 *
Marketable securities 966 608
Notes and accounts receivable 7,445 8,928
- trade, net
Short-term financing receivables, net 19,806 21,721
Other accounts receivable, net 1,089 981
Inventory 1,742 1,583
Deferred Costs 2,344 1,820 **
Prepaid expenses and 2,443 1,860 * **
other current assets
Total Current Assets 46,795 49,735
Property, plant and equipment, net 11,024 11,116
Long-term financing receivables, net 8,783 9,550
Prepaid pension assets 5,375 4,643
Deferred costs 2,613 2,136 **
Deferred taxes 4,689 4,862
Goodwill and intangibles, net 39,826 40,531
Investments and sundry assets 2,518 2,783 **
Total Assets $121,622 $125,356
LIABILITIES:
Current Liabilities:
Taxes $2,780 $4,219
Short-term debt 7,646 6,987
Accounts payable 5,518 6,451
Deferred income 11,752 11,552
Other liabilities 7,745 8,153
Total Current Liabilities 35,442 37,363
Long-term debt 37,851 39,837
Retirement related obligations 15,963 16,720
Deferred income 3,718 3,746
Other liabilities 10,000 9,965
Total Liabilities 102,974 107,631
EQUITY:
IBM Stockholders' Equity:
Common stock 54,827 54,566
Retained earnings 157,349 153,126
Treasury stock -- at cost (165,366) (163,507)
Accumulated other comprehensive (28,290) (26,592)
income/(loss)
Total IBM Stockholders' Equity 18,520 17,594
Noncontrolling interests 128 131
Total Equity 18,648 17,725
Total Liabilities and Equity $121,622 $125,356
* Recast to reflect adoption of the
FASB guidance on restricted cash.
** Recast to conform to current
period presentation.
INTERNATIONAL BUSINESS
MACHINES CORPORATION
CASH FLOW ANALYSIS
(Unaudited)
Three Months Ended Six Months Ended
(Dollars in Millions) June 30, June 30,
2018 2017 2018 2017
Net Cash Provided $2,295 $3,467 $6,896 $7,421
by Operating
Activities per GAAP:
Less: change in Global (582) 163 1,778 2,210
Financing
(GF) Receivables
Capital Expenditures, Net (1,004) (749) (1,897) (1,567)
Free Cash Flow 1,873 2,555 3,221 3,644
Acquisitions (51) (60) (122) (169)
Divestitures - 30 - 29
Dividends (1,437) (1,403) (2,819) (2,724)
Share Repurchase (989) (1,432) (1,767) (2,725)
Non-GF Debt (65) 2,119 (611) 2,363
Other (includes GF (559) (173) * 1,182 3,339 *
Net Receivables
and GF Debt)
Change in Cash, Cash
Equivalents,
Restricted Cash
and Short-term Marketable ($1,229) $1,636 * ($916) $3,758 *
Securities
* Recast to reflect
adoption of the
FASB guidance on
restricted cash.
INTERNATIONAL BUSINESS
MACHINES CORPORATION
CASH FLOW
(Unaudited)
Three Months Ended Six Months Ended
(Dollars in Millions) June 30, June 30,
2018 2017 2018 2017
Net Income from Operations $2,404 $2,331 $4,083 $4,082
Depreciation/Amortization 1,116 1,118 2,230 2,216
of Intangibles
Stock-based Compensation 125 136 242 265
Working Capital / Other (768) (281) (1,436) (1,351)
Global Financing A/R (582) 163 1,778 2,210
Net Cash Provided by $2,295 $3,467 $6,896 $7,421
Operating Activities
Capital Expenditures, net (1,004) (749) (1,897) (1,567)
of payments & proceeds
Divestitures, net of - 30 - 29
cash transferred
Acquisitions, net (51) (60) (122) (169)
of cash acquired
Marketable Securities / 420 (889) * (380) 342 *
Other Investments, net
Net Cash Used in Investing ($634) ($1,668) * ($2,399) ($1,365) *
Activities
Debt, net of payments (37) 2,279 (751) 2,756
& proceeds
Dividends (1,437) (1,403) (2,819) (2,724)
Common Stock Repurchases (989) (1,432) (1,767) (2,725)
Common Stock Transactions (55) (54) (91) (50)
- Other
Net Cash Used in Financing ($2,519) ($609) ($5,428) ($2,743)
Activities
Effect of Exchange Rate (444) 447 (344) 547
changes on Cash
Net Change in Cash, ($1,302) $1,637 * ($1,274) $3,860 *
Cash Equivalents
and Restricted Cash
* Recast to reflect
adoption of the
FASB guidance on
restricted cash.
INTERNATIONAL BUSINESS MACHINES CORPORATION
SEGMENT DATA
(Unaudited)
SECOND - QUARTER 2018
Technology
Global Services &
(Dollars in Millions) Cognitive Business Cloud Global
Solutions Services Platforms Systems Financing
Revenue
External $4,580 $4,192 $8,615 $2,177 $394
Internal 703 83 169 242 473
Total Segment Revenue $5,283 $4,275 $8,784 $2,419 $867
Pre-tax Income from Continuing Operations 1,756 385 883 346 357
Pre-tax margin 33.2% 9.0% 10.1% 14.3% 41.2%
Change YTY Revenue - External 0.5% 2.3% 2.5% 24.6% (4.9)%
Change YTY Revenue - External (1.3)% 0.0% 0.2% 22.9% (6.2)%
@constant currency
SECOND - QUARTER 2017
Technology
Global Services &
(Dollars in Millions) Cognitive Business Cloud Global
Solutions Services Platforms Systems Financing
Revenue
External $4,559 $4,097 $8,406 $1,747 $415
Internal 655 93 173 177 290
Total Segment Revenue $5,214 $4,190 $8,579 $1,924 $705
Pre-tax Income from Continuing Operations * 1,610 312 994 73 282
Pre-tax margin * 30.9% 7.4% 11.6% 3.8% 40.0%
* Recast to reflect adoption of the FASB guidance
on presentation of net benefit cost.
INTERNATIONAL
BUSINESS
MACHINES
CORPORATION
SEGMENT DATA
(Unaudited)
SIX - MONTHS 2018
Technology
Global Services &
(Dollars in Cognitive Business Cloud Global
Millions)
Solutions Services Platforms Systems Financing
Revenue
External $8,879 $8,365 $17,240 $3,676 $799
Internal 1,483 172 310 395 902
Total Segment $10,362 $8,538 $17,550 $4,072 $1,701
Revenue
Pre-tax Income 3,089 530 1,320 143 734
from
Continuing
Operations
Pre-tax margin 29.8% 6.2% 7.5% 3.5% 43.1%
Change YTY Revenue 3.0% 3.2% 3.7% 17.0% (2.5)%
- External
Change YTY Revenue 0.2% (0.6)% (0.2)% 14.4% (5.1)%
- External
@constant currency
SIX - MONTHS 2017
Technology
Global Services &
(Dollars in Cognitive Business Cloud Global
Millions)
Solutions Services Platforms Systems Financing
Revenue
External $8,621 $8,103 $16,622 $3,142 $819
Internal 1,371 179 333 344 653
Total Segment $9,992 $8,282 $16,955 $3,486 $1,473
Revenue
Pre-tax Income 2,878 593 1,668 (115) 592
/(Loss) from
Continuing Operations
*
Pre-tax margin * 28.8% 7.2% 9.8% (3.3)% 40.2%
* Recast to
reflect
adoption
of the FASB
guidance
on presentation of
net benefit cost.
INTERNATIONAL
BUSINESS
MACHINES
CORPORATION
U.S. GAAP
TO
OPERATING
(Non-GAAP)
RESULTS
RECONCILIATION
(Unaudited;
Dollars
in
millions
except
per
share
amounts)
SECOND - QUARTER 2018
CONTINUING OPERATIONS
Acquisition- Retirement- Tax Reform
Related Related One-Time Operating
GAAP Adjustments* Adjustments** Impact (Non-GAAP)
Gross $9,199 $94 - - $9,292
Profit
Gross 46.0% 0.5Pts - - 46.5%
Profit
Margin
S,G&A 4,857 (110) - - 4,746
R,D&E 1,364 - - - 1,364
Other 280 - (394) - (115)
(Income)
& Expense
Total 6,423 (110) (394) - 5,918
Expense
&
Other
(Income)
Pre-tax 2,776 204 394 - 3,374
Income
from
Continuing
Operations
Pre-tax 13.9% 1.0Pts 2.0Pts - 16.9%
Income
Margin
from
Continuing
Operations
Provision 373 44 109 14 540
for
(Benefit
from)
Income
Taxes***
Effective 13.5% 0.5Pts 1.6Pts 0.4Pts 16.0%
Tax Rate
Income 2,402 160 286 (14) 2,834
from
Continuing
Operations
Income 12.0% 0.8Pts 1.4Pts (0.1)Pts 14.2%
Margin
from
Continuing
Operations
Diluted $2.61 $0.17 $0.31 ($0.01) $3.08
Earnings
Per
Share:
Continuing
Operations
SECOND - QUARTER 2017
CONTINUING OPERATIONS
Acquisition- Retirement-
Related Related Operating
GAAP Adjustments* Adjustments** (Non-GAAP)
Gross $8,968 $117 - $9,085
Profit
Gross 46.5% 0.6Pts - 47.1%
Profit
Margin
S,G&A 5,033 (129) - 4,904
R,D&E 1,436 - - 1,436
Other 273 (4) (349) (80)
(Income)
& Expense
Total 6,525 (133) (349) 6,043
Expense
&
Other
(Income)
Pre-tax 2,443 250 349 3,042
Income
from
Continuing
Operations
Pre-tax 12.7% 1.3Pts 1.8Pts 15.8%
Income
Margin
from
Continuing
Operations
Provision 111 66 105 282
for
(Benefit
from)
Income
Taxes***
Effective 4.5% 1.8Pts 2.9Pts 9.3%
Tax Rate
Income 2,332 183 244 2,760
from
Continuing
Operations
Income 12.1% 1.0Pts 1.3Pts 14.3%
Margin
from
Continuing
Operations
Diluted $2.48 $0.20 $0.26 $2.94
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, amortization of prior service cost and insolvency insurance. 2017 adjustments were recast to reflect the adoption of the FASB guidance on net benefit cost.*** 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)
SIX - MONTHS 2018
CONTINUING OPERATIONS
Acquisition- Retirement- Tax Reform
Related Related One-Time Operating
GAAP Adjustments* Adjustments** Impact (Non-GAAP)
Gross $17,445 $187 - - $17,633
Profit
Gross 44.6% 0.5Pts - - 45.1%
Profit
Margin
S,G&A 10,302 (220) - - 10,082
R,D&E 2,769 - - - 2,769
Other 692 - (796) - (104)
(Income)
& Expense
Total 13,534 (220) (796) - 12,518
Expense
&
Other
(Income)
Pre-tax 3,911 407 796 - 5,114
Income
from
Continuing
Operations
Pre-tax 10.0% 1.0Pts 2.0Pts - 13.1%
Income
Margin
from
Continuing
Operations
Provision (166) 83 185 (93) 8
for
(Benefit
from)
Income
Taxes***
Effective (4.3)% 2.0Pts 4.3Pts (1.8)Pts 0.2%
Tax Rate
Income 4,078 324 611 93 5,106
from
Continuing
Operations
Income 10.4% 0.8Pts 1.6Pts 0.2Pts 13.1%
Margin
from
Continuing
Operations
Diluted $4.42 $0.35 $0.66 $0.10 $5.53
Earnings
Per
Share:
Continuing
Operations
SIX - MONTHS 2017
CONTINUING OPERATIONS
Acquisition- Retirement-
Related Related Operating
GAAP Adjustments* Adjustments** (Non-GAAP)
Gross $16,912 $236 - $17,148
Profit
Gross 45.2% 0.6Pts - 45.8%
Profit
Margin
S,G&A 10,060 (269) - 9,791
R,D&E 2,921 - - 2,921
Other 592 (7) (696) (111)
(Income)
& Expense
Total 13,046 (276) (696) 12,074
Expense
&
Other
(Income)
Pre-Tax 3,867 512 696 5,074
Income
from
Continuing
Operations
Pre-tax 10.3% 1.4Pts 1.9Pts 13.6%
Income
Margin
from
Continuing
Operations
Provision (218) 134 175 90
for
(Benefit
from)
Income
Taxes***
Effective (5.6)% 3.2Pts 4.2Pts 1.8%
Tax Rate
Income 4,085 378 521 4,984
from
Continuing
Operations
Income 10.9% 1.0Pts 1.4Pts 13.3%
Margin
from
Continuing
Operations
Diluted $4.32 $0.40 $0.56 $5.28
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, amortization of prior service cost and insolvency insurance. 2017 adjustments were recast to reflect the adoption of the FASB guidance on net benefit cost.*** 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)
2018
EPS Guidance Expectations
GAAP Diluted EPS at least $11.60
Operating EPS (non-GAAP) at least $13.80
Adjustments
Acquisition-related Charges * $0.78
Non-Operating Retirement-Related Items $1.32
Tax Reform One-time Charge $0.10
* Includes acquisitions as of June 30, 2018
IBMIan Colley, 914-434-3043colley@us.ibm.comorJohn Bukovinsky, 732-618-3531jbuko@us.ibm.com
View source version on businesswire.com: https://www.businesswire.com/news/home/20180718005876/en/
This information is provided by Business Wire
(END) Dow Jones Newswires
July 19, 2018 02:00 ET (06:00 GMT)
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