IBM’s shares rose 4% in after hours trading after the firm announced its Q4 and full-year financial results for 2012. Q4 revenue was flat* at $29.3bn, with operating income (non-GAAP) up 10% to $6.1bn. For the full year, revenues were also flat at $104.5bn. However, this did little to impact profit growth – due to growth in higher margin areas – and operating income (non-GAAP) climbed 8% to $17.6bn. Operating EPS for the year was up 13% to $15.25, which marks a tenth consecutive year of double-digit EPS growth. The firm has over $18bn of free cash flow - a record for IBM.
The company’s Global Services revenue was flat for the year. Global Technology Services (GTS) increased 1% to $40.2bn, with revenue impacted by on-going work to address low margin contracts. The company also saw a decline in sales into existing accounts, which translated into a 2% reduction in revenue from outsourcing. Global Business Services faired worse with an FY12 decline of 2% to $18.6bn, while the Software segment grew revenues by 4% to $25.4bn.
By geography, full-year Americas revenues were flat at $44.6bn, while Asia-Pacific revenues increased 3% to $25.9bn. EMEA faired the worse and was down 1% to $31.8bn. Loughridge blamed the macroeconomic climate for the decline in EMEA highlighting a challenging Q4 in both the UK and Germany. Also of note is that the UK started 2013 with a new Chief Executive - David Stokes – who has taken over from Stephen Leonard (see New CEO for IBM UK).
As Big Blue heads into 2013, it plans to continue its move to higher value business, which positions it well for continued profit growth. Indeed, IBM is calling a minimum 8% increase in EPS in 2013, compared to the 10% acheived in 2012.
*All figures quoted are at constant currency