Market Overview

IBM Reports 2019 Third-Quarter Results

Share:

Strong Performance by Red Hat Accelerates Cloud Revenue Growth

Highlights

Third Quarter:

  • GAAP EPS from continuing operations of $1.87
  • Operating (non-GAAP) EPS of $2.68
  • Net cash from operating activities of $15.4 billion and free cash flow of $12.3 billion, over the last 12 months
  • Debt reduced by $6.7 billion since the end of second quarter
  • Revenue of $18.0 billion, down 3.9 percent (down 0.6 percent adjusting for divested businesses and currency)
  • Revenue for Red Hat, up 19 percent (up 20 percent adjusting for currency), normalized for historical comparability
  • Revenue growth in Cloud & Cognitive Software and Global Business Services segments

    -- Cloud & Cognitive Software up 6 percent (up 8 percent adjusting for currency)

    -- Global Business Services up 1 percent (up 2 percent adjusting for currency)
  • Cloud revenue of $5.0 billion in the third quarter, up 11 percent (up 14 percent adjusting for divested businesses and currency)

    -- Cloud revenue of $20.0 billion over the last 12 months

2019 Full-year Expectations:

  • GAAP EPS of at least $10.58; maintains operating (non-GAAP) EPS of at least $12.80
  • Maintains free cash flow of approximately $12 billion

 

IBM (NYSE:IBM) today announced third-quarter results.

"In the third quarter, as we continued to help clients with their digital reinventions, we grew revenue in our Cloud & Cognitive Software segment and in Global Business Services," said Ginni Rometty, IBM chairman, president and chief executive officer. "Our results demonstrate that clients see IBM and Red Hat as a powerful combination and they trust us to provide them with the open hybrid cloud technology, innovation and industry expertise to help them shift their mission-critical workloads to the cloud."

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

THIRD QUARTER 2019

 

 

 

Results Reflect the Impact of Items Related to

 

 

 

the Red Hat Acquisition Closed in July 2019

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax

 

Gross

 

 

 

Diluted

 

Net

 

Pre-tax

 

Income

 

Profit

 

 

 

EPS

 

Income

 

Income

 

Margin

 

Margin

 

GAAP from Continuing Operations

 

$

1.87

 

$

1.7B

 

$

1.5B

 

8.4

%

46.2

%

Year/Year

 

 

(36)

%

 

(38)

%

 

(49)

%

(7.5)

Pts

(0.7)

Pts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating (Non-GAAP)

 

$

2.68

 

$

2.4B

 

$

2.4B

 

13.3

%

47.4

%

Year/Year

 

 

(22)

%

 

(24)

%

 

(33)

%

(5.9)

Pts

(0.0)

Pts

"We continued our focus on the strength of our balance sheet in the third quarter," said James Kavanaugh, IBM senior vice president and chief financial officer. "We generated $12.3 billion in free cash flow over the last 12 months and with our disciplined financial management we reduced debt by nearly $7 billion in the quarter, while maintaining a strong cash balance."

Cash Flow and Balance Sheet

In the third quarter, the company generated net cash from operating activities of $3.6 billion, or $2.5 billion excluding Global Financing receivables. IBM's free cash flow was $1.8 billion. IBM returned $1.6 billion to shareholders through $1.4 billion in dividends and $0.1 billion in gross share repurchases. The company suspended its share repurchase program on July 9.

IBM ended the third quarter with $11.0 billion of cash on hand. Debt, including Global Financing debt of $23.1 billion, totaled $66.3 billion – down $6.7 billion since the end of the second quarter.

Segment Results for Third Quarter

  • Cloud & Cognitive Software (includes cloud and data platforms which includes Red Hat; cognitive applica
View Comments and Join the Discussion!
 
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com