IBM (News - Alert) saw mixed results in Q4 as well as for the entire year of 2013. On the bright side, in a Tuesday announcement IBM said profit for the most recent quarter went beyond analysts’ predictions – thanks in part to higher revenue from software.
In total, the company’s net profit increased 6 percent to $6.19 billion in Q4 of 2013, compared to Q4 of the prior year when it was $5.83 billion. On the other hand, revenue dropped 5.5 percent to $27.7 billion, which was less than the $28.25 billion that had been estimated for Q4 by analysts surveyed by Thomson Reuters (News - Alert), according to Reuters News Service.
Looking at the year, IBM experienced a drop in yearly revenue for the second straight year, with lower hardware sales part of the reason for the decline.
The Wall Street Journal said the recent quarter was the seventh straight quarter IBM reported lower revenue when compared to the quarters from the prior years.
"We continued to drive strong results across much of our portfolio and again grew earnings per share in 2013,” Ginni Rometty, IBM CEO, said in a statement. “While we made solid progress in businesses that are powering our future, in view of the company’s overall full year results, my senior team and I have recommended that we forgo our personal annual incentive payments for 2013.”
Looking ahead, she said the company remains on target for 2015 for operating earnings per share of at least $20. In addition, IBM predicts it will see full-year 2014 GAAP earnings per share of at least $17 and operating (non-GAAP) earnings per share of at least $18.
IBM needs to come up with new sources of revenue because growth has slowed in some emerging markets, The Journal said. It was also reported IBM may sell its low-end server business to Lenovo (News - Alert), with negotiations now under way.
It was announced by IBM that Q4 revenues from IBM’s middleware products were $5.8 billion, which was 5 percent more than Q4 of 2012, and operating systems revenue was $687 million, which was 3 percent less than Q4 of the prior year.
IBM announced too that net income for last year was $16.5 billion compared with $16.6 billion in 2012. Operating (non-GAAP) net income in 2013 was $18 billion compared to $17.6 billion in 2012. Revenues for 2013 were $99.8 billion, a 5 percent drop compared with $104.5 billion in 2012.
Broken down by location, the Americas saw full-year revenue of $43.2 billion, which is a decline of 3 percent from 2012. Revenues in Europe, the Middle East and Africa were $31.6 billion, which is flat when comparing the two years. Asia-Pacific region revenue declined 12 percent to $22.9 billion. Revenues in the BRIC countries (Brazil, Russia, India and China) declined 8 percent.