IBM 4Q Profit Tops Street Despite Slower Sales
International Business Machines (NYSE:IBM) revealed much stronger-than-expected fourth-quarter earnings late Tuesday and unveiled an upbeat fiscal 2013 outlook.
The Armonk, N.Y.-based PC maker reported net income of $5.8 billion, or $5.13, up 6% from a year ago.
Excluding one-time items, IBM said it earned $6.1 billion, or $5.39 a share, easily topping average analyst estimates of $5.25 in a Thomson Reuters poll.
Shares of IBM climbed nearly 3% after hours to $201.60.
"Our performance in the fourth quarter and for the full year was driven by our strategic growth initiatives -- growth markets, analytics, cloud computing, Smarter Planet solutions -- which support our continued shift to higher-value businesses,” said IBM chairman Ginni Rometty.
Revenue for the three-month period was $29.3 billion, down 1% from a year ago, but topping the Street’s view of $29.1 billion. The performance was driven by a 3% increase in software revenue, partially offset by a 2% decline in services.
IBM has been experiencing sales declines over the last few quarters related to a slowdown in Europe. Last quarter, it reported a 5% year-over-year decline in sales.
The company, however, is more optimistic on fiscal 2013.
IBM is anticipating non-GAAP EPS of at least $16.70 in the current year, above the consensus view of $16.63.