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IBM Grows Earnings but Misses on Revenue

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IBM (NYSE: IBM  )  today announced earnings per share of $3.68 on net income of $4 billion -- which were up 11% and 6%, respectively, over the last quarter. However, its revenue fell by 2% after adjusting for currency fluctuations, to $23.7 billion.

IBM's systems and technology segment experienced the biggest losses, with revenue falling there by $650 million, or 16%. Revenue for its global technology services division also fell by approximately $400 million, or 4.3%. In addition, it saw significant losses in its growth markets, which fell by 5% after adjusting for currency. The release also noted that its revenue from the BRIC countries (Brazil, Russia, India, and China) fell by 12%.

While IBM's total gross profit fell by $350 million, it did see its gross profit margin rise from 47.4% to 48%. In total, its net income of $4.0 billion was an improvement on the $3.8 billion posted in the third quarter of 2012.

IBM CEO Ginni Rometty said of the results, "In the third quarter we continued to expand operating margins and increased earnings per share, but fell short on revenue. Where we had identified high growth opportunities and pursued them aggressively -- cloud, mobile, business analytics, and security -- we continued to show strong growth."

She added that IBM is "taking action to improve execution in our growth markets unit and in the elements of our hardware businesses that are under performing."

IBM expects to have full-year earnings per share of $15.01 in 2013, and Rometty reassured investors that the company remains confident that it will be able to deliver $20 operating earnings per share in 2015.


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Patrick Morris
TMFMorris

After a few stints in banking and corporate finance, Patrick joined the Motley Fool as a writer covering the financial sector. He's scaled back his everyday writing a bit, but he's always happy to opine on the latest headline news surrounding Berkshire Hathaway, Warren Buffett and all things personal finance.

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