IBM Financial Performance

2021

Revenue - $57.35 billion, profit - $5.74 billion

IBM revenue in 2021 reached $57.35 billion against $55.18 billion a year earlier. The volume of IBM software business (this includes Red Hat solutions and software for automation, information security, Big Data, artificial intelligence, etc.) amounted to $24.14, and in 2020 - $22.93 billion. Cloud sales for the year increased by 20%, to $20.2 billion.

Chief Financial Officer Jim Kavanaugh stressed that the cloud solutions and consulting segment has seen a "healthy acceleration" in financial performance growth.

At the end of 2021, IBM's consulting division showed revenue growth to $17.84 billion from $16.26 billion a year earlier. In the direction of infrastructure solutions (based on IBM Z mainframes), revenues decreased slightly - from $14.53 billion in 2020 to $14.19 billion a year later. In the financial services market, IBM revenue fell from $975 million to $774 million.

IBM's net profit in 2021 turned out to be $5.74 billion, which exceeds the figure of a year ago of $5.59 billion. From the IBM report, it also follows that the company's profit in the field of consulting services in 2021 amounted to $1.45 billion against $1.03 billion in profit a year earlier. In the software division, profit increased from $3.34 billion to $4.72 billion, and in the infrastructure division - from $1.65 billion to $2.03 billion.

In 2021, the flow of cash from IBM's core operations will amount to $12.8 billion, and free cash flow - $6.5 billion. These and other results include the indicators of Kyndryl (separated from IBM) for 10 months of 2021.

By the end of 2021, IBM had accumulated cash in the amount of $7.6 billion against $6.7 billion a year earlier. The total debts of the company for the year decreased by $9.6 billion and amounted to $51.7 billion. Most of this amount comes from funds raised to buy Red Hat.^[1]

Second place in the world among ICT developers by revenue

According to Synergy Research Group, the total revenue of the 13 largest manufacturers of software and ICT services for business, including telecom operators, in this market reached $613 billion in 2021, which is 10% more than a year earlier. IBM took second place in this list.

2020: Revenue continues to decline due to falling sales of IT equipment

In 2020, IBM raised $73.62 billion against $77.15 billion a year earlier. One of the catalysts for this decline was the IT equipment production unit (Systems), whose revenues fell to $6.98 billion from $7.6 billion in 2019.

According to Bloomberg, IBM's revenue has not grown from year to year for 10 consecutive quarters. Apparently, the company's recovery plan, which was introduced by its new CEO Arvind Krishna, requires more time to implement and achieve results.

The actions that we have taken to focus our business on hybrid cloud services and artificial intelligence will begin to yield returns, and this gives us confidence that we will be able to achieve revenue growth in 2021, "Krishna said, commenting on the financial results.

In 2020, the Cloud & Cognitive Software division registered an increase in turnover to $23.38 billion from $22.89 billion a year earlier. In the direction of Global Business Services, sales decreased from $16.8 billion to $16.16 billion. Revenue in Global Technology Services fell even more - from $27.36 billion to $25.81 billion.

In 2020, IBM earned $34.1 billion in the Americas, which is 4% less than a year ago. In the Asia-Pacific region and EMEA, sales also decreased by 4%, to $15.9 billion and $23.6 billion, respectively.

According to data from the financial statements, IBM cloud revenue at the end of 2020 reached $25.1 billion, an increase of 19% compared to 2019. Excluding fluctuations in currencies and assets, which the company has already disposed of, revenues rose by 20%. The revenue of IBM-controlled Red Hat for the year increased by 18%, "normalizing at a level comparable to historical data," the report said. ^[2]]

2019: Revenue drop from $79.6 billion to $77.15 billion

In 2019, IBM revenue began to fall again: it amounted to $77.15 billion against $79.59 billion a year earlier. The main reason for the decline lies in the decrease in demand for IT equipment. The corresponding division (Systems) completed the year with a turnover of $7.6 billion, while in 2018 it exceeded $8 billion.

In the direction of technology services and cloud platforms (Cloud & Cognitive Software), a rise in sales was recorded from $22.2 billion to $23.2 billion. Revenues in the field of cloud services increased by 11%, to $21.2 billion. Excluding fluctuations in exchange rates and indicators of sold assets, cloud revenue jumped 14%.

IBM's annual revenue in the business services market (Global Business Services division) changed slightly to $16.63 billion.

In IBM Global Technology Services, which in 2019 ceased to be the largest in the US corporation, turnover fell to $27.36 billion from $29.15 billion in 2018.

At the end of 2019, IBM received a net profit of $9.43 billion, which is 8% higher than the profit a year ago. True, in 2018, the company made a one-time payment of $1.9 billion in connection with the update of tax legislation in the United States.

On the day of the release of the financial results of 2019, IBM quotes rose by 5% due to the fact that the profit and sales of the IT giant were higher than market expectations.

2019 will be remembered by IBM by closing the deal to buy Red Hat. Joining Red Hat has not yet fully affected IBM's profits. So far, it is not possible to calculate Red Hat's deferred revenue in IBM's total sales in accordance with accounting rules. However, IBM CFO James Kavanaugh said the purchase of Red Hat in 2019 has already begun to bear fruit.^[3]

2018

Revenue growth in AI-based software platform solutions segment by 26.6%

Revenue growth by 1% to $79.6 billion

In 2018, IBM revenue amounted to $79.6 billion, which is 1% more than a year earlier. If exchange rate fluctuations are not taken into account, the company's sales have not changed. Prior to this, the revenue of the IT giant fell for 6 years.

IBM revenues increased largely due to the cloud business, which jumped 12% in 2018 and reached $19.2 billion.

On analytical decisions, the company earned $21.7 billion, which is 9% higher than a year ago. Mobile products brought the company $5 billion in revenue, which is 3% more than in 2017.

Revenue from the so-called "strategic imperatives," which IBM includes cloud services,  artificial intelligence, analytical tools, social networks, mobile technologies and solutions in the  field of information security, increased by 9% year-on-year - to $39.8 billion.

The Technology Services & Cloud Platforms division, which is responsible for infrastructure services, technical support services and integration software development, recorded revenues of $34.5 billion at the end of 2018. In 2017, sales were about the same.

IBM Systems, a structure specializing in IT equipment and operating systems, recorded a 2 percent decline in revenue in 2018 - up to $8 billion. The OS brought the company $1.7 billion in revenue.

In the direction of business services (Global Business Services), there was an increase in annual revenue by 2% and reaching its size of $16.8 billion. Consulting revenues increased by 5%, reaching $7.7 billion. The volume of business in the field of application management services amounted to $7.9 billion, which does not reach the value of 2017 by 1^[4]

Sales of IBM cognitive solutions (this includes the Watson AI platform, analytical and IB services) in 2018 turned out to be $18.5 billion, which is about the same as a year earlier.

IBM's net profit in 2018 grew to $8.7 billion from $5.8 billion in 2017.

2017

6-year revenue drop

In 2017, IBM revenue amounted to $79.1 billion against $79.9 billion in 2016. Sales of the American corporation continue to fall since 2011.

IBM's net profit in 2017 was halved - from $11.9 billion to $5.8 billion, which the company explained by additional costs resulting from a change in tax laws in the United States.

In 2017, the tax rate from the main activity of the company amounted to 12%, and in 2018, according to management forecasts, the indicator may increase to 16% plus or minus 2 percentage points.

The so-called "strategic imperatives," which IBM includes cloud services,  artificial intelligence, analytical tools, social networks, mobile technologies and information security solutions, brought the company $36.5 billion in 2017, which is 11% more than a year ago. The listed technologies began to generate 46% of IBM revenue.

The volume of cloud business for the year reached $17 billion, which is 24% more compared to 2016. IBM plans to maintain large investments in "strategic imperatives" in 2018.

IBM's largest division is Technology Services & Cloud Platforms, which covers infrastructure services, technical support services, and integration software development. In 2017, revenue here amounted to $34.3 billion, a decrease of 3% year on year.

Revenues of the American vendor in the business services market (Global Business Services structure) decreased by 2% to $16.3 billion. Sales of cognitive solutions increased by 1% to $18.5 billion, and IBM Systems, the division responsible for the production of IT equipment and operating systems, ended 2017 with a 5 percent increase in turnover, which turned out to be $8.2 billion. The implementation of servers and other hardware increased by 9% to $6.5 billion.^[5]

Third Quarter: Mainframes Give Hope for Long-Awaited Growth

In October 2017, IBM published a quarterly financial report. Server business showed growth of 10% thanks to new mainframes. This equipment should help the American company return to growing revenue.

In July-September 2017, the revenue of Systems, which, in addition to servers, is responsible for the production of storage systems (storage) and operating systems, amounted to $1.7 billion against $1.6 billion a year earlier. In the third quarter of 2016, sales here fell by 21%.

In the third quarter of 2017, IT equipment, in particular, brought the blue giant a turnover of $1.3 billion, which is 14% more than a year ago. The share of Systems revenues in the total revenue of the American giant reached about 7%.^[6]

Most of IBM's revenue comes from Cognitive Solutions cognitive , Global Business Services and Technology Services & Cloud Platforms. ON

Commenting on financial results, the president, the CEO and the chairman of the board of directors of IBM Ginni Rometty noted that the market "enthusiastically accepted new mainframes of z Systems which provide to clients breakthrough opportunities of safety".

According to analyst Edward Jones & Co. Josh Olson, mainframes will make a big contribution to the long-awaited growth of revenue expected IBM in the fourth quarter 2017. Such equipment is very profitable for manufacturers, since many software products and services are sold with it, the expert emphasized.

According to Bloomberg, mainframe business is cyclical, and analysts doubt IBM's ability to maintain growth in this market after falling sales of server equipment as a whole. In this regard, Josh Olson believes that IBM should show growth in other markets, such as cloud and other services, especially since the fall in the traditional IT-Business is stronger than the growth of new categories.^[7]

In July-September 2017, IBM z Systems mainframe sales jumped 62%, data warehouses - 4%, while the implementation of servers on Power processors decreased by 8%. The company has not released servers on the standard x86 processor architecture since 2014, when it sold the corresponding business to Chinese Lenovo.

From the IBM message, it follows that the company's storage sales grew during the first three quarters of 2017 in a row. Champion Solutions Group (IBM partner) Senior Vice President of Strategic Marketing Mike Piltoff confirmed CRN's strong recovery in demand for IBM storage. According to him, IBM has an excellent assortment of storage, especially for flash-based solutions.^[8]

IBM has many good flash storage systems. This business is becoming mainstream, "said Piltoff.

He added that IBM's storage business is growing, despite the company's lack of x86 servers. Such systems install approximately 75% of the storage that Champion supplies to customers. IBM Power servers account for only 25% of these sales.

According to IDC analysts, the global storage market in the second calendar quarter reached $10.8 billion, an increase of almost 3% year-on-year.

In July-September 2017, IBM revenue in quarterly terms decreased for the 22nd time in a row, although the decline was minimal - by 1% compared to the third quarter of 2016, to $19.15 billion. Compared to the second quarter of 2017, revenue rose by $2.9 billion due to the mainframe mentioned above. IBM expects to complete a protracted drop in revenue in October-December 2017, expecting growth of about 1.5%, to $22-22.1 billion, which is more than the average forecast of Wall Street analysts ($21.8 billion).

After the publication of this positive forecast, IBM quotes jumped 9% - the highest since 2009. At the same time, from the beginning of January to October 18, 2017, the company's quotes decreased by 12%. As a result of a 9 percent increase in the price of IBM securities, the market capitalization of IT Corporation for the day immediately increased by $12.6 billion.

Q2 - Continued storage revenue growth

In July 2017, IBM published a financial report for the second quarter. It follows that the company's revenue in the storage (storage) market continued to grow after a protracted decline.

In April-July 2017, storage sales brought IBM 8% more revenue than in the same period of the previous year. In the first quarter, growth was measured at 7%, while more than five previous calendar quarters of sales of this equipment at the company decreased.

The improvement in the IBM storage market was associated with a double-digit increase in sales of arrays built exclusively on flash drives (the so-called all-flash solutions). At the same time, the main profit comes from medium and high-level platforms.

IBM did not specify exactly how much the company earned on storage sales. The report only says that the revenue of IBM Systems Group, which includes storage systems, as well as servers, in the second quarter of 2017 amounted to $1.7 billion, down by 10% on an annual basis.

According to IBM CFO Martin Schroeter, the profitability of mainframe and storage sales increased in April-June 2017 relative to the same period in 2016. The margin in the IBM Power Systems server segment also rose, but here there was growth only in quarterly terms.

In February 2017, the head of IBM's storage division, Ed Walsh, said in an interview with SearchStorage that flash storage was a priority for the company in the storage market. These devices, in particular, are used in the IBM Watson supercomputer for Big Data processing.

In the second quarter of 2017, IBM's total revenue decreased by 5% to $19.3 billion. Excluding currency fluctuations, the decline was 3%.^[9]

2016

Another drop in revenue

On January 18, 2017, IBM published its annual financial report. It follows that the company's revenue has been steadily declining for almost 5 years, since the fast-growing directions of the IT giant cannot compensate for the decline in traditional markets.

In 2016, IBM revenue amounted to $79.9 billion, a decrease of 2% compared to the previous year. In October-December, sales decreased by 1% ($21.8 billion), and this quarterly decline was the 19th in a row. Annual net profit fell 11% to $11.9 billion.

The decline in IBM revenue is largely due to a decrease in sales of servers and other IT equipment. The Systems division responsible for it in 2016 recorded revenue of $7.7 billion, while a year earlier it was measured at $9.5 billion.

Amid the fall of traditional business, IBM relies on new fast-growing areas, which the company calls "strategic imperatives." These include cloud products, artificial intelligence, analytical tools, social networks, mobile technologies and information security solutions. In 2016, "strategic imperatives" brought the American corporation $32.8 billion in revenue (41% of the total), which is 13% more than a year ago. The volume of cloud business increased by 35%, to $13.7 billion.

IBM predicts that the number of users of artificial intelligence technologies implemented by the Watson cognitive platform will reach 1 billion. In 2016, IBM cognitive sales rose 1.4% compared to 2015 and amounted to $5.3 billion.

The IBM report also said that in 2016, the company's revenues in the business services market (Global Business Services division) decreased by 4.1% year on year - to $4.1 billion. Technology Services & Cloud Platforms (covering infrastructure services, technical support services and integration software development) showed a 1.7 percent increase in sales to $9.3 billion.^[10]

2015

Profit growth by 10%

On January 19, 2016, IBM published a financial report, which shows that the company's sales have been declining for almost four years. The reason for this is the high dollar exchange rate and the fall of the IT market.

In 2015, IBM revenue amounted to $81.7 billion, which is 12% less than a year earlier. In October-December, income decreased by 8.5%, and this quarterly decline was the 15th in a row.

Speaking to reporters and analysts at a conference on the publication of IBM results, the company's chief financial officer Martin Schroeter said that due to the strong dollar, the Blue Giant did not count $7 billion in revenue in 2015 and $300 million in profit in the fourth quarter. According to the forecasts of the top manager, unfavorable fluctuations in currency rates will lead to a decrease in profits before IBM taxation by $1.3 billion in 2016.

According to Reuters, in 2015 the US dollar index grew by 9%, and in 2016 it is expected to grow further by 3.4%.^[11]

At the end of 2015, IBM's net profit turned out to be $13.2 billion, which is almost 10% more than a year ago.

According to IBM's financial report, the company's annual revenues from sales of technology and business services amounted to $32 billion (-9.7% by 2014) and $17.2 billion (-12%), respectively.

Sales software decreased by almost 10% to $23 billion. At the same time, IBM's cloud business is on the rise: its volume in 2015 reached $10 billion (sales of cloud equipment data centers and the provision of professional services in this area are taken into account), an increase of 43% year on year.

According to IBM, thanks to the offer of comprehensive cloud solutions, the number of contracts worth more than $100 million in this market in 2015 increased by 40%.

IBM's hardware business has been in decline for several years. The company's revenue from sales of servers, storage systems and other equipment at the end of 2015 decreased by about a quarter, amounting to $7.58 billion.^[12]

IBM is trying to stop the decline in software sales

On April 21, 2015, IBM management announced the need to strengthen the company's position in the software industry, otherwise it would not be possible to fulfill its financial tasks.

At the end of 2015, IBM forecasts operating profit in the range from $15.75 to $16.5 per share. To achieve these targets, we need to do everything possible to stop the fall in software sales, IBM Chief Financial Officer Martin Schroeter said during a conference on April 21, 2015 to publish the corporation's quarterly reports.

IBM believes that without strengthening the software business, the company will not be able to fulfill its financial tasks

In January-March 2015, the IBM Software division responsible for the development and sale of software received revenue of $5.2 billion, which decreased by 8.2% year-on-year. Excluding currency fluctuations, negative dynamics were measured at 2%.

In 2014, the company's software revenue fell by almost 2%. This business brings the Blue Giant about 28% of its revenue. In the software sales structure, about two-thirds of the volume is occupied by key IBM integration solutions, including WebSphere. Operating systems account for about 8% of revenues (data for the first quarter of 2015).

Credit Suisse analyst Kalbinder Garcha says that in order to achieve at least zero growth in software revenue in 2015, IBM needs to achieve double-digit business rates in the past three calendar months.

"However,

given the results of the first quarter, the likelihood of such progress is very low," Garcha said.

The expert predicts IBM operating profit at $15.58 per share in 2015, which is 3.4% less than the forecast of the American manufacturer itself. Credit Suisse employee attributed this difference in revenue expectations to the fact that IBM is unlikely to be able to return the software business to a positive trajectory.

According to Bloomberg observers, IBM will really not be easy to stop the fall in software sales during the reorganization of the corresponding division, which is developing a number of new products and switching to a subscription model for software distribution.^[13]

According to Kalbinder Garchi, the sale of software by subscription occupies only a fourth of the revenue of IBM Software, and the remaining revenues fall on the traditional implementation of licenses.

Sales are falling, assets are not profitable

In the first quarter of 2015, IBM sales amounted to $19.6 billion, which is 12% less than in 2014^[14].

Profit fell 5%, to $2.4% billion. IBM refers to the appreciation of the dollar - it negatively affected financial results, since two-thirds of the corporation's income comes from abroad. If fluctuations in currencies and the results of recent sales of corporate units were taken into account, then the volume of sales has not changed compared to 2014, according to IBM.

In the second quarter of 2015, IBM is trying to get rid of inefficient divisions and invest in strategic areas, which see:

• cloud systems,
• analytics
• mobile technology.

The corporation intends to invest $3 billion in the created division. Internet of Things

IBM revenues in these segments grew by 20%, but did not compensate for the decline in sales of other departments (revenue from cloud services in 2014 grew by more than 60%). Even taking into account changes in exchange rates, sales, both in the service department and in the software department fell by 2%.

And the revenues of the mainframe division increased more than twice. This was facilitated by the release of mainframe z13. However, IBM equipment sales fell 23% to $1.7 billion.

During the first quarter, $1.1 billion was paid to shareholders in the form of dividends, the company sent $1.2 billion to repurchase shares.

2014

IBM revenue in 2014 fell by 5.7%, profit by 27%

On January 21, 2015, IBM released a financial report reflecting the results of work in 2014. The company's profit fell by 27%, and revenue - by 5.7%. Sales of the blue giant have been steadily declining for almost three years.^[15]

In 2014, IBM's net profit amounted to $12 billion against $16.5 billion a year earlier. Revenue decreased to $92.8 billion from $98.4 billion in 2013. In October-December, sales decreased by 12% year-on-year, and this quarterly decline was the 11th in a row.

By the end of 2014, IBM had accumulated about $8.5 billion in cash and cash equivalents, as well as short-term investments. The company allocated 6% of revenue to research and development.

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IBM revenue falls nearly 3 years

"We have made significant progress in reorganizing our operations while continuing to shift our business focus towards more profitable directions. Our investments and benchmarks are designed for the long term, "IBM Chief Executive Officer Ginni Rometty commented on the financial results.

According to her, the company considers mobile, cloud and analytical technologies, as well as solutions in the field of social services and information security (IS) to be strategically important. IBM revenue from these products in 2014 rose 16% to $25 billion, which corresponds to 27% of the total turnover of the American corporation.

The cloud business added about $7 billion to IBM revenue, which is 60% higher than in 2013. In the mobile, analytical and IB segments, company revenues jumped by 200%, 7% and 19%, respectively.

This rise contrasts with IBM's failed hardware direction, which Systems and Technology is responsible for. The company's revenue from sales of servers, storage systems and other equipment in 2014 fell by 23% to $10 billion.

The IBM report also says that in 2014, the company earned $37.1 billion (-3.7% compared to the previous year) and $17.8 billion (-3.1%) from technology and business services, respectively. The volume of the software business decreased by 1.9% to $25.4 billion. Among the company's divisions, only IBM Global Financing, which is responsible for various financial services, showed revenue growth in 2014 - by 0.6% to $2 billion.

IBM has become cheaper than Oracle

After IBM announced unsatisfactory financial results of the third quarter of 2014, corporation quotes began to fall rapidly. As a result, as of November 20, 2014, IBM shares fell to such a level that the market capitalization of the American company was lower than that of rival Oracle.^[16]

Since October 1, 2014, the value of IBM securities decreased by 14% to $161.43 apiece at the time of the closure of the New York Stock Exchange on Wednesday, November 19. The manufacturer's capitalization fell to $159.8 billion against Oracle's $181.3 billion. Shares of the latter for the same period rose in price from $38.09 to $40.92.

IBM's market capitalization is lower than Oracle's

In the third quarter of 2014, IBM's revenue fell for the tenth time in a row (to $22.4 billion), which the head of the company Jeannie Rometty (Ginni Rometty) called an "unsatisfactory result," after which he canceled the goal of achieving profit of $20 per share in 2015, which was set by its predecessor (Sam Palmizano Sam Palmisano).

Investors were disappointed with IBM's financial failures, but Ginny Rometti gave cause for optimism. In November 2014, the corporation announced several products (for example, IBM Verse) and large transactions that can provide revenue growth in the long run.

Firstly, IBM entered into an IT outsourcing agreement worth 1 billion euros with the largest To Europe airline in the world. Lufthansa IBM also began to collaborate Twitter with in the field of analyzing these messages in the social network, necessary for the correct formation of business solutions. China In the "blue giant" signed Tencent Holdings a contract with a large Internet provider to jointly develop cloud solutions.

In addition, IBM expanded its partnerships with SAP, allowing the latter to use their data centers, and instead gaining access to the SAP HANA database and client Internet platform. Finally, as it became known in November, IBM teamed up with Nvidia (Nvidia) to work on the most powerful supercomputer on Earth.

2013: IBM sales decline continues

IBM recorded a 4% decline in revenue in Q3 2013 to $23.7 billion. In the same period of the previous year, the corporation's revenue amounted to $24.7 billion. Profit increased by 6% to $4 billion.

IBM revenue in the first 9 months of 2013 decreased by 4% to $72.1 billion compared to the same period in 2012.

The decline in revenue is mainly due to a drop in sales of the hardware division - by 17% to $3.2 billion. The decrease was also recorded in the service delivery unit, but not so significant - by 3%.

Revenue from the sale of Power Systems servers on the Power architecture fell 38%, System x servers on the x86 architecture - 18%. Revenue from the sale of System z mainframes increased by 6%. Storage sales were down 11%.

As a result, IBM's total revenue in China for the specified period fell by 22%, and sales in the region of hardware - by 44%. Lofridge believes that in early 2014, demand for equipment from foreign companies in China will increase, that the decline will not be constant.

2012

Results of the year: tenth year in plus

IBM's net profit for 2012 increased by 5% even though revenue declined by 2%. In 2012, IBM's revenue amounted to $104.5 billion, while in 2011 it amounted to $106.9 billion.

Net profit amounted to $16.6 billion, while in 2011 it amounted to $15.9 billion. Since 2011, earnings per share have grown by 10%, and this is the tenth year in a row when income per share of the company grows by 10% for the year or more.

Virginia Rometty, President and CEO of IBM, attributed the financial success to a range of initiatives, including boosting the market for analytics, cloud, and smart systems.

Revenue for 2012, it grew by 80% in the cloud market. Revenue from smart systems increased by 25% over the same period. Separately, IBM's business in growing markets, such as India and China, grew by 4% in 2012 compared to 2011.

America remains the largest geographical market for IBM, where in 2012 the corporation earned $44.6 billion, which is 1% less than 2011. Revenue in EMEA decreased by 6% to $31.8 billion, while in the Asia-Pacific region it grew by 3% to $25.9 billion.

It is also interesting that in the equipment segment, IBM revenue decreased, while software sales were in the plus. The service direction in 2012 amounted to $58.8 billion, which is 2% less than 2011 year, of which $18.6 billion (-4% in annual comparison) was accounted for by business services.

IBM's revenue from software sales for 2011 amounted to $25.4 billion (+ 2% in annual comparison), while the systems and technology division earned $17.7 billion (-7% in annual comparison). IBM's finance division generated $2 billion in revenue, which is 4% less than in 2011.

Separately, in the fourth quarter of 2012, IBM's revenue amounted to $29.3 billion, which is 1% less than the same period a year earlier. Net profit in the fourth quarter was $5.8 billion (-6% in annual comparison).

Q3: IBM Revenues Fall Across All Items

IBM Corporation, which recently reoriented itself to selling more high-margin software and services compared to equipment, nevertheless, reported a decrease in revenue in the third quarter of 2012. The company earned $24.7 billion, which is 5% less in annual terms. Analysts expected a slightly higher performance, in particular, Thomson Reuters predicted revenue at $25.36 billion.

IBM net profit in the third quarter of 2012 amounted to $3.8 billion, which is almost the same as a year earlier. Revenue per share was $3.33, which is 4% higher than the same indicator of the third quarter of 2011.

In terms of geographical markets, IBM in the Americas and Australia was the most negative. So, in the Americas, the company's revenue amounted to $10.4 billion, which is 4% less in annual terms. Revenue in EMEA amounted to $7.2 billion, which is 9% less in annual terms. In the Asia-Pacific region, the company's revenue increased by 1%.

The service technology division showed revenue of $9.9 billion (minus 4% in annual terms), the business services division - $4.5 billion (minus 6%). Revenue from software sales amounted to $5.8 billion (minus 1%), revenue from the sale of middleware products such as WebSphere, Tivoli and Lotus also decreased by 1% to $3.6 billion in annual terms.

According to Gartner Vice President Chris Ambrose, such results are associated with a number of reasons. In particular, in recent years, customers using service services have changed their approach to consuming services: now they prefer to split them into several small contracts between different providers. Exchange rate differences in the dollar/euro also affected, which had a depressive effect on IT spending in Europe. The expert also believes that now customers are lengthening IT update cycles in order to reduce the corresponding costs.

Q2: 3% Revenue Reduction

In the second quarter of the next fiscal year, IBM's revenue amounted to $25.8 billion, which is 3% less than the second quarter of 2011. The failure of the corporation's revenue was much more serious than analysts expected: according to Thompson Reuters forecasts, for example, the company's revenue for the second quarter was supposed to be $26.28 billion (-1.5% in annual terms).

Despite the decline in revenue, IBM's other financial performance was quite satisfactory. First of all, the corporation's net profit amounted to $3.9 billion compared to $3.7 billion in the second quarter of 2011. As a result, earnings per share amounted to $3.34, which is 11% more in annual terms.

IBM CFO Mark Loughridge said in a conversation with analysts that "IBM's business model has made it possible to achieve the highest possible performance in current market conditions." He acknowledged that the quarter was difficult enough for the company, and also referred to currency fluctuations that cost IBM up to $1 billion in revenue.

America remained the largest market for IBM, here the Blue Giant earned $11.1 billion (-1% in annual terms), revenue in the EMEA region amounted to $7.9 billion (-9% in annual terms). In the Asia-Pacific region, IBM earned $6.3 billion, 2% more than a year earlier.

IBM's service division showed a 3% decline in revenue in annual terms, Global Technology Services showed $10 billion (-2%), and Global Business Services - $4.7 billion (-4%). Software sales as a whole remained "flat," the proceeds from the sale of software amounted to $6.2 billion. Equipment sales decreased in relation to other business areas as much as possible - by 9% to $4.3 billion.

However, there are separate segments where IBM's business was successful: it is BI (+ 13%), cloud solutions (compared to the first half of 2011, revenue doubled), revenues in the direction of Smarter Planet solutions grew by 20%. However, the company does not disclose specific figures for these technologies.

Q1: Sales Below Plan

While analysts expected IBM revenues of $24.82 billion in the first quarter of 2012, the company announced a slightly smaller value - $24.7 billion. The figures do not differ fundamentally, but in any case they reflect a decrease in revenues from hardware sales by 7% to $3.7 billion, a decrease from business services by less than 2% to $4.6 billion, growth from software by 5% to $5.6 billion, growth from technology services by 2% to $10 billion.

IBM's relatively low revenue report led to an immediate decrease in its stock prices by 1.9% to $203.50. However, passions quickly subsided, and soon securities rose in price by 2.3% to $207.45. Recall that as of April 3, the historical maximum value of blue giant shares was recorded at $210.69.

However, amid declining yields for the period from January to March, IBM earned $3.07 billion or $2.61 per share. The company showed a 7% increase in business profitability, noticeably exceeding the forecasts of Wall Street analysts. Excluding the impact on earnings of a range of acquisitions and benefit payments, it was $2.78 per share, while analysts predicted $2.66. The decline in stock prices was due to the lack of full investor confidence in IBM's ability to effectively develop new business areas, and not only squeeze profits from one service division.

IBM increased its 2012 profitability forecast from $14.85 to $15 per share (analysts estimate $14.93). Until 2015, the company expects to increase profitability to $20 per share. This is a rather rare case when such a large company openly declares clearly defined long-term goals.

The corporation also officially confirmed its intention to sell Toshiba Tec for $850 million to the retail business.

2011: 7% increase in net profit to $15.9 billion

Net profit at the end of 2011, calculated taking into account GAAP requirements, reached $15.9 billion, showing an annual growth of 7%;

Net annual operating profit (excluding GAAP requirements) rose 9% to $16.3 billion.

• Total annual income increased by 7% (3% adjusted for exchange rate changes) to $106.9 billion;

• Free cash flow grew by $300 million over the year to $16.6 billion;

• Revenues in regional growing markets increased by 16% (11% adjusted for changes in exchange rates);

• Revenue from sales of business intelligence systems increased by 16%;

• Income from sales of decisions for "The reasonable planet" showed (Smarter Planet) growth in 47%;

• Revenue from sales of cloud computing solutions increased by 3 times compared to the same 2010 total.

2010: Sales growth by 4% to $99.9 billion

At the end of 2010, the company's revenue reached $99.9 billion, an increase of 4%, profit increased by 10% to $14.8 billion.

Free cash flow rose $1.2 billion over the year to a record $16.3 billion;

Gross profit margin rose to 46.1%, showing growth for the seventh year in a row.

In the regional context, revenue grew the most in the Asia-Pacific region - by 12% to $23.2 billion at the end of the year, - while in the EMEA region (Europe, the Middle East, Africa) - decreased by 2% at the end of the year to $31.9 billion.

Separately, the company noted high growth rates in the BRIC group (Brazil, Russia, India, China) - in the 4th quarter, IBM's total revenue in these countries grew by 19% (by 17% taking into account currency fluctuations).

Russia is the leader in IBM revenue growth among all BRIC countries. In the third quarter of fiscal year 2010, which ended on September 30, the company in Russia grew by 56% compared to the same period in 2009. In India, IBM sales increased by 15%, in China - by 36%, in Brazil - by 15%. The average growth in the BRIC region in the third quarter was 26%, in the second - 16%, in the first - 14%.

software IBM sales for the 4th quarter of 2010 increased by 7% to $7 billion. As part of this value, sales ON WebSphere grew by 32%, - Lotus decreased by 3%. The latter was the result of a decrease in demand for IBM products for collaboration amid the development of alternatives from and. Microsoft Google Software sales in 2010 increased by 5.1% to $22.5 billion.

Sales of Business Analytics, including both software and related services, increased by 19% in Q4 2010.

The revenue of Systems and Technology in the 4th quarter grew by 21% to $6.3 billion, partly due to good sales of System z mainframe servers (compared to 2009, their sales increased by 69%). Sales of System x servers in the last quarter of 2010 increased by 18%, Power servers - by 2%. Sales of entry-level equipment increased by 30%, average price range - by 7%, storage systems - by 8%. The group's revenue for the whole of 2010 increased by 11% to $18 billion.

Global Services revenue in the 4th quarter of 2010 increased by 2%, Global Technology Services - by 1% to $10.2 billion, Business Services - by 4% to $4.8 billion. In the 4th quarter of 2010, the company signed contracts for the provision of services in the amount of $22.1 billion, an 18% increase compared to year-on-year. The volume of outsourcing contracts increased by 24% to $14.1 billion. The revenue growth of Global Technology Services and Global Business Services at the end of 2010 year amounted to 2.3% and 3.2%, respectively (up to $38.2 billion and $18.2 billion, respectively).

"We ended the year with stunning results, recording record profit and free cash flow and exceeding the boldest revenue forecasts per share for 2010," said IBM Chief Executive Officer Samuel Palmisano.

According to Palmizano, between 2011 and 2015, IBM plans to spend $20 billion on acquisitions. At the same time, 15 transactions were announced in 2010, including the purchase of a specialist in the field of data analysis Netezza for $1.7 billion.

IBM expects an improvement in the IT market in 2011. Analysts note that IBM begins the new fiscal year, being in good enough positions to ensure further growth. IBM became the second major high-tech company after Intel to forecast a further recovery.

2005: Final Results: Consulting Chief Sales Driver

Revenue for 2005 $91.134 billion

• IBM Global Services (IGS, consulting department) - $47.357  billion.
• Systems and Technology Group (STG, Equipment Division) -  $23.857 billion
• Software Group (development branch ON) - $15.753  billion

Notes