IBM this week announced first-quarter 2007 diluted earnings of $1.21 per share from continuing operations, an increase of 12 percent as reported, compared with diluted earnings of $1.08 per share in the first quarter of 2006. First-quarter income from continuing operations was $1.8 billion compared with $1.7 billion in the first quarter of 2006, an increase of 8 percent. Total revenues for the first quarter of 2007 of $22 billion increased 7 percent (4 percent, adjusting for currency) from the first quarter of 2006.
"IBM's good results in the quarter demonstrate the breadth of our global capabilities, the advantages of our business model, and our focus on profitable growth," said Samuel J. Palmisano, IBM chairman, president and chief executive officer. "We continued to grow in the higher-value products and services that help our clients transform their businesses. We again grew gross profit margins and earnings, and continued to generate significant cash from operations. This gives us considerable financial capability to strengthen our position in the profitable growth segments and create further value for our investors."
From a geographic perspective, the Americas first-quarter revenues were $9.1 billion, an increase of 1 percent as reported (1 percent, adjusting for currency) from the 2006 period. Revenues from Europe/Middle East/Africa were $7.6 billion, up 13 percent (5 percent, adjusting for currency). Asia-Pacific revenues increased 10 percent (9 percent, adjusting for currency) to $4.5 billion. OEM revenues were $828 million, down 5 percent compared with the 2006 first quarter.
Total Global Services revenues grew 8 percent (4 percent, adjusting for currency). Segment revenues from Global Business Services increased 9 percent (6 percent, adjusting for currency) to $4.2 billion, and segment revenues from Global Technology Services increased 7 percent (4 percent, adjusting for currency) to $8.3 billion. IBM signed services contracts totaling $11.1 billion, down 2 percent year over year, and ended the first quarter with an estimated services backlog, including Strategic Outsourcing, Business Transformation Outsourcing, Global Business Services, Integrated Technology Services and Maintenance, of $115 billion.
Systems and Technology Revenues
Revenues from the Systems and Technology (S and T) segment totaled $4.5 billion for the quarter, up 2 percent (flat, adjusting for currency). S and T revenues from System z server products increased 12 percent compared with the year-ago period. Total delivery of System z computing power, which is measured in MIPS (millions of instructions per second), increased 9 percent. Revenues from the System p UNIX server products increased 14 percent compared with the 2006 period. Revenues from the System x servers increased 7 percent, and revenues from the System i servers decreased 13 percent. Revenues from Microelectronics decreased 7 percent and revenues from System Storage decreased 1 percent.
Revenues from the Software segment were $4.3 billion, an increase of 9 percent (5 percent, adjusting for currency) compared with the first quarter of 2006. Revenues from IBM's middleware products, which primarily include WebSphere, Information Management, Tivoli, Lotus and Rational products, were $3.2 billion, up 10 percent versus the first quarter of 2006. Operating systems revenues of $522 million were flat compared with the prior-year quarter. Revenues from other software and services increased, which includes the Product Lifecycle Management portfolio of products.
For the WebSphere family of software products, which facilitate customers' ability to manage a wide variety of business processes using open standards to interconnect applications, data, and operating systems, revenues increased 14 percent. Revenues for Information Management software, which enables clients to leverage information on demand, increased 20 percent. Revenues from Tivoli software, infrastructure software that enables customers to centrally manage networks including security and storage capability, increased 18 percent, and revenues for Lotus software, which allows collaborating and messaging by customers in real-time communication and knowledge management, increased 7 percent year over year. Revenues from Rational software, integrated tools to improve the processes of software development, increased 15 percent compared with the year-ago quarter.
Global Financing segment revenues increased 6 percent (3 percent, adjusting for currency) in the first quarter to $614 million. The company's total gross profit margin was 40.2 percent in the 2007 first quarter compared with 39.1 percent in the 2006 period -- the 11th consecutive quarter of year-to-year increase.
Total expense and other income increased 11 percent to $6.3 billion compared with the prior-year period. SG and A expense increased 11 percent to $5.1 billion. RD and E expense increased 4 percent compared with the year-ago period. Intellectual property and custom development income decreased to $205 million compared with $229 million a year ago. Other (income) and expense contributed income of $180 million in the first quarter of 2007 versus income of $246 million in the first quarter of 2006.
IBM's effective tax rate in the first-quarter 2007 was 28.5 percent compared with 30.0 percent in the first quarter of 2006. Shares repurchased totaled approximately $3.5 billion in the first quarter. The weighted-average number of diluted common shares outstanding in the first-quarter 2007 was 1.52 billion compared with 1.59 billion shares in the same period of 2006. As of March 31, 2007, there were 1.48 billion basic common shares outstanding.
Debt, including Global Financing, totaled $23.9 billion, compared with $22.7 billion at year-end 2006. From a management segment view, the non-global financing debt-to-capitalization ratio was 2.8 percent at the end of March 31, 2007, and Global Financing debt increased $1.0 billion from year-end 2006 to a total of $23.2 billion, resulting in a debt-to-equity ratio of 6.9 to 1.
More than ever, there is a demand for IT to deliver innovation. Your IBM i has been an essential part of your business operations for years. However, your organization may struggle to maintain the current system and implement new projects. The thousands of customers we've worked with and surveyed state that expectations regarding the digital footprint and vision of the company are not aligned with the current IT environment.
TRY the one package that solves all your document design and printing challenges on all your platforms. Produce bar code labels, electronic forms, ad hoc reports, and RFID tags – without programming! MarkMagic is the only document design and print solution that combines report writing, WYSIWYG label and forms design, and conditional printing in one integrated product. Make sure your data survives when catastrophe hits. Request your trial now! Request Now.
Forms of ransomware has been around for over 30 years, and with more and more organizations suffering attacks each year, it continues to endure. What has made ransomware such a durable threat and what is the best way to combat it? In order to prevent ransomware, organizations must first understand how it works.
Disaster protection is vital to every business. Yet, it often consists of patched together procedures that are prone to error. From automatic backups to data encryption to media management, Robot automates the routine (yet often complex) tasks of iSeries backup and recovery, saving you time and money and making the process safer and more reliable. Automate your backups with the Robot Backup and Recovery Solution. Key features include:
Business users want new applications now. Market and regulatory pressures require faster application updates and delivery into production. Your IBM i developers may be approaching retirement, and you see no sure way to fill their positions with experienced developers. In addition, you may be caught between maintaining your existing applications and the uncertainty of moving to something new.
IT managers hoping to find new IBM i talent are discovering that the pool of experienced RPG programmers and operators or administrators with intimate knowledge of the operating system and the applications that run on it is small. This begs the question: How will you manage the platform that supports such a big part of your business? This guide offers strategies and software suggestions to help you plan IT staffing and resources and smooth the transition after your AS/400 talent retires. Read on to learn:
LATEST COMMENTS
MC Press Online