Shulou(Shulou.com)11/24 Report--

Thanks to CTOnews.com netizen Xiao Zhan for the clue delivery! In the early morning of April 20, Beijing time, IBM today released the company's financial results for the first quarter of fiscal year 2023. IBM's revenue in the first quarter was $14.252 billion, up 0.4 per cent from $14.197 billion a year earlier, and 4.4 per cent year-on-year excluding exchange rate changes, according to the report. Net profit was $927 million, compared with $733 million a year earlier, and profits from continuing operations were $934 million, up 41 per cent from $662 million a year earlier.

IBM's first-quarter revenue fell short of expectations, but adjusted earnings per share beat Wall Street analysts' expectations, sending its shares up nearly 2 per cent in after-hours trading.

Key results: IBM's net profit for the quarter ended March 31, 2023 was $927 million, compared with $733 million a year earlier.

IBM's first-quarter profit from continuing operations was $934 million, up 41% from $662 million a year earlier, and diluted earnings per share from continuing operations were $1.03, up 41% from $0.73 a year earlier. IBM posted a loss of $7 million from non-continuing operations in the first quarter, compared with a profit of $71 million from non-continuing operations in the same period last year, and a diluted loss of $0.010 per share from non-continuing operations, compared with a diluted profit of $0.080 per share from non-continuing operations in the same period last year.

Excluding general accounting principles (excluding certain one-time items), IBM's first-quarter net operating profit from continuing operations was $1.2 billion, down 2% from $1.3 billion a year earlier; diluted earnings per share from continuing operations were $1.36, down 3% from $1.40 a year earlier, but still beat analysts' expectations. On average, 12 analysts had expected IBM to earn $1.26 a share in the first quarter, according to Yahoo Finance.

IBM's first-quarter revenue was $14.252 billion, up 0.4% from $14.197 billion a year earlier, and 4.4% year-on-year, excluding currency changes, which fell short of analysts' expectations. On average, 11 analysts had expected IBM's first-quarter revenue to reach $14.35 billion, according to Yahoo Finance.

IBM's first-quarter gross profit was $7.509 billion, up 2 per cent from $7.335 billion a year earlier; excluding US general accounting principles (excluding certain one-time items), IBM's first-quarter operating gross profit was $7.658 billion, up 2 per cent from $7.516 billion a year earlier.

IBM's gross margin in the first quarter was 52.7%, compared with 51.7% a year earlier. Excluding US GAAP (excluding certain one-time items), IBM's gross operating margin was 53.7 per cent in the first quarter, compared with 52.9 per cent in the same period a year earlier. By business unit, the gross margin of the IBM software division was 79.5% in the first quarter, compared with 78.8% in the same period last year; the gross margin of the consulting department was 25.2% in the first quarter, compared with 24.3% in the same period last year; and the gross profit margin of the infrastructure division in the first quarter was 51.7%, compared with 50.5% in the same period last year. The financing division had a gross margin of 43.9% in the first quarter, compared with 37.7% in the same period last year.

Costs and expenses: IBM's total expenses and other income in the first quarter were $6.451 billion, compared with $6.712 billion in the same period last year. Of this total, sales, general and administrative expenses were $4.853 billion, compared with $4.597 billion in the same period last year; R & D and engineering expenditure was $1.655 billion, compared with $1.679 billion in the same period last year; and intellectual property and customs development income was $180 million, compared with $121 million in the same period last year. Other income was $245 million, compared with $246 million for other expenses in the same period last year, and interest expense was $367 million, compared with $311 million for the same period last year.

Sector performance data: in the first quarter of fiscal 2023, revenue from the IBM software business, which includes hybrid platforms and solutions and transaction processing, was $5.921 billion, up 2.6 per cent from $5.772 billion a year earlier, and 5.6 per cent year-on-year, excluding exchange rate changes. Where:

-revenue from the hybrid platform and solutions division grew by 2% year-on-year, excluding exchange rate changes by 5%

-revenue from the Red Hat division increased by 8% year-on-year, excluding exchange rate changes, by 11% year-on-year

-Automation revenue fell 1% year-on-year, excluding exchange rate changes, up 2% year-on-year

-data and AI (artificial Intelligence) revenue increased by 1% year-on-year, excluding the impact of exchange rate changes.

-Security sector revenue fell 1% year-on-year, excluding exchange rate changes, up 2% year-on-year

-the revenue of the transaction processing division increased by 3% year-on-year, excluding exchange rate changes, by 7% year-on-year.

Revenue from the IBM consulting business, which includes business transformation, technology consulting and applications, was $4.962 billion in the first quarter, up 2.8 per cent from $4.829 billion a year earlier, and 8.2 per cent year-on-year, excluding currency changes. Where:

-Business transformation revenue increased by 1% year-on-year, excluding exchange rate changes, by 6% year-on-year

-Technical consulting revenue fell 1% year-on-year, excluding exchange rate changes, an increase of 4% year-on-year

-Application operating revenue increased by 7% year-on-year, excluding the impact of exchange rate changes, an increase of 13% year-on-year.

Revenue from IBM's infrastructure business unit, which includes hybrid infrastructure and infrastructure support, was $3.098 billion in the first quarter, down 3.7 per cent from $3.219 billion a year earlier, and 0.1 per cent year-on-year growth excluding currency changes. Where:

-revenue from the hybrid infrastructure sector grew by 1% year-on-year, excluding exchange rate changes, by 4%.

-revenue from "z Systems" increased by 7% year-on-year, excluding exchange rate changes, by 11%.

-the revenue of the distributed infrastructure division fell 3% year-on-year, excluding exchange rate changes.

-Infrastructure support revenue fell 9% year-on-year, excluding exchange rate changes, down 4% year-on-year.

Revenue from IBM's financing division, which includes customers and commercial finance, was $196 million in the first quarter, up 27.3% from $154 million a year earlier, and 31.0% year-on-year, excluding exchange rate changes.

IBM's revenue from other business units was $75 million in the first quarter, compared with $224 million in the same period a year earlier.

Other financial information: IBM's net cash from operating activities in the first quarter was $3.8 billion, an increase of $500 million compared to the same period last year; excluding accounts receivable from global finance, IBM's net cash from operating activities in the first quarter was $1.8 billion.

IBM's free cash flow in the first quarter was $1.3 billion, an increase of $100 million compared with the same period last year.

In the first quarter, IBM returned $1.5 billion in cash to shareholders in the form of dividends.

At the end of the first quarter of 2023, IBM held $17.6 billion in cash (including marketable securities), an increase of $8.8 billion compared to the end of 2022, and total debt of $58.7 billion (of which $10.5 billion was owed by the global finance division), an increase of $7.8 billion compared to the end of 2022.

Performance outlook: IBM now expects revenue growth of between 3 and 5 per cent year-on-year for fiscal 2020, excluding currency movements.

According to IBM's previous financial results, the company had revenue of $60.53 billion in fiscal 2022. On this basis, IBM's outlook means that the company expects revenue of between $62.346 billion and $63.557 billion in fiscal 2023, below analysts' expectations. On average, 16 analysts expect IBM's revenue in fiscal year 2023 to reach $64.95 billion, according to Yahoo Finance.

IBM also expects the company's total free cash flow to reach about $10.5 billion in fiscal 2023, an increase of more than $1 billion compared to fiscal year 2022.

Stock price response:

IBM shares fell $1.46, or 1.14%, to $126.32 in regular trading on the New York Stock Exchange. In after-hours trading as of 06:19 est on the 19th (06:19 Beijing time on the 20th), IBM shares rose $2.39, or 1.89 per cent, to $128.71. Over the past 52 weeks, the IBM has peaked at $153.21 and the lowest at $115.55.

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