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IBM beats by $0.13, reports revs in-line; guides FY17 EPS just above consensus
- Reports Q4 (Dec) earnings of $5.01 per share, excluding non-recurring items, $0.13 better than the Capital IQ Consensus of $4.88; revenues fell 1.3% year/year to $21.77 bln vs the $21.63 bln Capital IQ Consensus.
- Cognitive Solutions (includes solutions software and transaction processing software) -- revenues of $5.3 bln, up 1.4% (up 2.2% adjusting for currency) were driven by growth in cloud, analytics and security.
- Global Business Services (includes consulting, global process services and application management) -- revenues of $4.1 bln, down 4.1% (down 3.6% adjusting for currency).
- Technology Services & Cloud Platforms (includes infrastructure services, technical support services and integration software) -- revenues of $9.3 bln, up 1.7% (up 2.4% adjusting for currency). Growth was driven by strong hybrid cloud services, analytics and security performance.
- Systems (includes systems hardware and operating systems software) -- revenues of $2.5 bln, down 12.5% (down 12.1% adjusting for currency). Gross profit margins improved driven by z Systems performance.
- Fourth-quarter cloud revenues increased 33%. The annual exit run rate for cloud as-a-service revenue increased to $8.6 bln from $5.3 bln at year-end 2015. Revenues from analytics increased 9%. Revenues from mobile increased 16% (up 17% adjusting for currency) and revenues from security increased 7% (up 8% adjusting for currency).
- Co issues upside guidance for FY17, sees EPS of at least $13.80, excluding non-recurring items, vs. $13.74 Capital IQ Consensus Estimate.
- "In 2016, our strategic imperatives grew to represent more than 40 percent of our total revenue and we have established ourselves as the industry's leading cognitive solutions and cloud platform company," said Ginni Rometty, IBM chairman, president and chief executive officer. "IBM Watson is the world's leading AI platform for business, and emerging solutions such as IBM Blockchain are enabling new levels of trust in transactions of every kind."