IBM's Q4 net income grows 6% in spite of falling revenues
January 23, 2014, 12:06 am TWN
ARMONK, New York--IBM's fourth-quarter net income grew 6 percent, surpassing Wall Street's expectations even though revenue fell. Its shares fell in extended trading after the results came out — and CEO Ginni Rometty said she's recommending that senior executives, including herself, forgo personal bonuses for the year.
IBM Corp. said Tuesday that it earned US$6.19 billion, or US$5.73 per share, in the October-December period. That's up from US$5.83 billion, or US$5.13 per share, in the same period a year earlier.
IBM's adjusted earnings were US$6.13 per share in the latest quarter.
Revenue fell 5.5 percent to US$27.7 billion from US$29.3 billion.
Analysts, on average, had expected adjusted earnings of US$5.99 per share on revenue of US$28.27 billion, according to FactSet.
IBM is the world's largest technology-services company. Its results provide a gauge of businesses' appetite for technology spending.
Hardware revenue plunged 26 percent to US$4.3 billion in the fourth quarter. Software revenue increased 3 percent to US$8.1 billion, however, and services revenue slipped 4 percent to US$9.9 billion.
The Armonk, New York, company is forecasting 2014 earnings of at least US$17 per share and adjusted earnings of at least US$18 per share. Analysts expect US$18.02 per share.
Rometty said the company remains "on track" toward its adjusted earnings goal of at least US$20 in 2015.
For the full year, IBM earned US$16.5 billion, or US$14.94 per share, compared with earnings of US$16.6 billion, or US$14.37 per share, in 2012. Adjusted earnings were US$16.28 per share. Revenue fell 5 percent to US$99.8 billion from US$104.5 billion.
IBM's shares fell US$5.04, or 2.7 percent, to US$183.39 in after-hours trading. The stock had closed down US$1.66 at US$188.43 earlier.