IBM has announced increased revenue and income for the fourth quarter of 2009, ending the year strongly.
The company has reported fourth-quarter 2009 diluted earnings of $3.59 per share compared with diluted earnings of $3.27 per share in the fourth quarter of 2008, an increase of 10%.
Fourth-quarter net income was $4,8-billion compared with $4,4-billion in the fourth quarter of 2008, an increase of 9%. Total revenues for the fourth quarter of 2009 of $27.2 billion increased 1% (down 5%, adjusting for currency) from the fourth quarter of 2008.
"We concluded a strong year with a solid performance in the fourth quarter in which we again delivered growth in margins, profit and earnings," says Samuel Palmisano, IBM chairman, president and CEO. "IBM continued to benefit from our strategic transformation, offerings that our clients value in this economy, and our commitment to developing countries around the world.
"In 2009, we invested in opportunities such as Smarter Planet solutions, cloud computing and advanced analytics. These new capabilities position IBM to grow as the economy recovers. The increased operational leverage we have established by creating a globally integrated enterprise will enable us to drive greater profits as revenue growth returns. We are confident about 2010 and our ability to achieve the high end of our long-term roadmap."
The company said it expects full-year 2010 diluted earnings-per-share expectations of at least $11.00.
The company’s total gross profit margin was 48,3% in the 2009 fourth quarter compared with 47,9% in the 2008 fourth-quarter period, led by improving margins in both services segments and systems & technology.
Overall gross profit margins improved year to year for the 21st time in the last 22 quarters; total services gross profit margins improved year to year for the 19th time in the last 20 quarters.
Total expense and other income decreased 5% to $6,8-billion compared with the prior-year period. SG&A expense decreased 5% to $5,6-billion. RD&E expense of $1,5-billion decreased 4% compared with the year-ago period. Intellectual property and custom development income decreased to $313-million compared with $328-million a year ago. Other income and expense was income of $24-million compared with income of $97-million from a year ago. Interest expense decreased to $81-million compared with $192-million in the prior year.
Net income for the year ended 31 December 2009 was $13,4-billion compared with $12,3-billion in the year-ago period, an increase of 9%. Diluted earnings were $10.01 per share compared with $8.89 per diluted share in 2008, an increase of 13%. Revenues for 2009 totaled $95,8-billion, a decrease of 8% (5%, adjusting for currency), compared with $103,6-billion in 2008.
The company’s total gross profit margin was 45,7% in 2009 compared with 44,1% in 2008, led by improving margins in both services segments and software. Overall gross profit margins improved year over year for the sixth consecutive year.
The weighted-average number of diluted common shares outstanding in 2009 was 1,3- billion compared with 1.39 billion shares in 2008. As of 31 December 2009, there were 1,31-billion basic common shares outstanding.
Debt, including Global Financing, totaled $26,1-billion, compared with $33,9-billion at year-end 2008. From a management segment view, Global Financing debt totaled $22,4-billion versus $24,4-billion at year-end 2008, resulting in a debt-to-equity ratio of 7.1 to 1. Non-global financing debt totaled $3,7-billion, a decrease of $5,8-billion since year-end 2008, resulting in a debt-to-capitalisation ratio of 16% from 48,7%.
IBM ended 2009 with $14-billion of cash on hand and generated free cash flow of $15,1-billion, up more than $800-million year over year. The company returned $10,3-billion to shareholders through $2,9-billion in dividends and $7,4-billion of share repurchases.