IBM fourth-quarter 2004 diluted earnings per common share increased 16% from the previous year.
Fourth-quarter income from continuing operations was $3.1 billion compared with $2.7 billion a year ago, an increase of 12 percent. Revenues from continuing operations for the fourth quarter were $27.7 billion, up 7 percent compared with the fourth quarter of 2003 revenues of $25.9 billion (and up 18 percent sequentially from $23.4 billion in the third quarter of this year).
Samuel J. Palmisano, IBM chairman and chief executive officer, said: “IBM delivered a powerful fourth quarter, reflecting the strength of our integrated business model. It was IBM’s strongest fourth quarter ever, with earnings exceeding $3 billion for the first time. Our balance sheet remains strong with superior cash flow, and we took share in key markets. We also returned $8.3 billion to our shareholders through dividends and stock buyback during 2004, the most we have done in our history. The strategic actions that IBM took last year have increased our focus on delivering high value to enterprises. IBM is well positioned to continue our mission of bringing together the best insight, expertise and technologies to help our clients transform their businesses.”
Fourth-quarter revenue growth of 7 percent (3 percent, adjusting for currency) was driven by growth across all geographies. In the Americas, fourth-quarter revenues from continuing operations were $11.1 billion, up 5 percent (4 percent, adjusting for currency) from the 2003 period. Revenues from Europe/Middle East/Africa were $10.0 billion, an increase of 9 percent (1 percent, adjusting for currency). Asia-Pacific revenues grew 6 percent (3 percent, adjusting for currency) to $5.8 billion. OEM revenues increased 10 percent to $787 million compared with the fourth quarter of 2003.
Revenues grew in all of IBM’s five industry sectors in the fourth quarter led by the Communications sector, as well as growth in sales to Small and Medium Businesses.
Revenues from Global Services, including maintenance, increased 10 percent (6 percent, adjusting for currency) to $12.6 billion in the fourth quarter. Global Services revenues, excluding maintenance, increased 11 percent (7 percent, adjusting for currency). IBM signed services contracts totaling $12.7 billion and ended the quarter with an estimated services backlog, including Strategic Outsourcing, Business Consulting Services, Integrated Technology Services and Maintenance, of $111 billion.
Hardware revenues from continuing operations increased 4 percent (1 percent, adjusting for currency) to $9.5 billion in the fourth quarter versus the fourth quarter of 2003. Revenues from the Systems and Technology Group totaled $5.9 billion for the quarter, up 5 percent on eServer revenue increases, including a 25 percent increase in xSeries servers and a 15 percent increase in pSeries UNIX servers. Revenues from the zSeries mainframe product decreased compared with the prior-year quarter, which was particularly strong, while MIPS (millions of instructions per second), an indicator of total delivery of zSeries computing power, increased 6 percent. Revenues for the iSeries midrange servers and Storage Systems decreased primarily as a result of a transition to new products. Revenues from OEM Technology increased. Personal Systems Group increased revenues 2 percent to $3.5 billion. In the quarter, IBM announced an agreement to sell the Personal Computer Division, a unit of the Personal Systems Group.
Revenues from Software were $4.5 billion, an increase of 7 percent (3 percent, adjusting for currency) compared with the fourth quarter of 2003. Revenues from IBM’s middleware brands, which include WebSphere, DB2, Rational, Tivoli and Lotus products, were $3.7 billion, up 8 percent versus the fourth quarter of 2003. Operating systems revenues increased 1 percent to $693 million compared with the fourth quarter of 2003.
Revenues for WebSphere software, which facilitates customers’ ability to manage a wide variety of business processes using open standards to interconnect applications, data and operating systems, increased 18 percent. Revenues for Data Management increased 8 percent including revenues for DB2 database software, which increased 15 percent. Revenues from Tivoli software (infrastructure software that enables customers to centrally manage networks and storage) increased 25 percent, and revenues for Lotus software, which enables customers to communicate, collaborate and learn effectively, increased 5 percent. Revenues from Rational (comprehensive software development tools) increased 8 percent compared with the fourth quarter of 2003.
Global Financing revenues declined 10 percent (13 percent, adjusting for currency) in the fourth quarter to $657 million. Revenues from the Enterprise Investments/Other area, which includes industry-specific IT solutions such as product life-cycle management software, increased 1 percent (down 2 percent, adjusting for currency) to $365 million compared with the fourth quarter of 2003.
The company’s total gross profit margin from continuing operations was 39.2 percent in the 2004 fourth quarter, compared with 38.4 percent in the fourth quarter of 2003.
Murdok | Breaking eBusiness News
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