IBM boosts full-year profit despite lower revenue

IBM relied on growth markets and new initiatives to boost its bottom line

Making the most of a sluggish world economy, IBM managed to increase its net income by 5 percent in 2012, even though revenue shrank by 2 percent.

IBM reported revenue of US$104.5 billion for fiscal 2012, down from $106.9 billion in 2011. Net income was $16.6 billion, or $14.37 per share, up from $15.9 billion a year earlier. The earnings-per-share figure is up 10 percent from 2011, the tenth consecutive year that IBM increased its full-year earnings by 10 percent or more.

Ginni Rometty, IBM chairman, president and CEO, attributed the financial buoyancy to various growth initiatives, including efforts in analytics, cloud computing and Smarter Planet systems, along with a strong emphasis on growing markets.

Full-year revenue from "cloud operations" increased by 80 percent, according to IBM. Smarter Planet system revenue increased by 25 percent. And business in growth markets -- such as India and China -- increased by 4 percent year over year. IBM didn't give precise figures in its press release for the cloud and Smarter Planet sales.

Revenue for the Americas totalled $44.6 billion for the year, a decrease of 1 percent compared to 2011. Revenue from Europe, the Middle East and Africa shrank 6 percent to $31.8 billion, while Asia-Pacific revenue increased 3 percent to $25.9 billion.

By sector, IBM's services and hardware businesses shrank while software sales grew.

Services brought in $58.8 billion in 2012, a decrease of 2 percent from a year earlier. The Global Technology Services division generated $40.2 billion in revenue, a decrease of 2 percent, while Global Business Services tallied $18.6 billion for the year, down 4 percent.

IBM generated $25.4 billion in software revenue for 2012, an increase of 2 percent, while the company's hardware arm, Systems and Technology, generated $17.7 billion, a decrease of 7 percent. The financing arm of IBM generated revenue of $2 billion, a decrease of 4 percent from a year earlier.

Looking at the fourth quarter, revenue was $29.3 billion, down 1 percent from a year earlier. Net income was $5.8 billion, up 6 percent from the fourth quarter of 2011. Earnings per share climbed 11 percent to $5.13.

Joab Jackson covers enterprise software and general technology breaking news for The IDG News Service. Follow Joab on Twitter at @Joab_Jackson. Joab's e-mail address is Joab_Jackson@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags business issuesIBMfinancial results

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Joab Jackson

IDG News Service
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?