EmailIBM (IBM $202.48 -8.60) reported third quarter earnings of $3.62 per share, $0.01 better than the Capital IQ consensus of $3.61, while revenues fell 5.4% year/year to $24.75 billion versus the $25.36 billion consensus Gross Profit (non-GAAP 48.1% up 12 bps y/y. The company reaffirmed guidance for fiscal year 2012 with EPS of at least $15.10, excluding non-recurring items, vs. $15.15 Capital IQ Consensus Estimate. Segments: Software revenue down 1 percent, up 3 percent adjusting for currency. Services revenue down 5 percent, flat adjusting for currency; Services backlog of $138 billion, up 1 percent. Systems and Technology revenue down 13 percent, down 12 percent adjusting for currency; Growth markets revenue down 1 percent, up 4 percent adjusting for currency; BRIC countries up 4 percent, up 11 percent adjusting for currency; Business analytics revenue up 14 percent year to date; Smarter Planet revenue up more than 20 percent year to date; Cloud revenue year to date has exceeded full-year 2011 revenue.
The Americas' third-quarter revenues were $10.4 billion, a decrease of 4 percent from the 2011 period. Revenues from Europe/Middle East/Africa were $7.2 billion, down 9 percent. Asia-Pacific revenues increased 1 percent to $6.5 billion. OEM revenues were $538 million, down 28 percent compared with the 2011 third quarter. Revenues from the company's growth markets decreased 1 percent and 35 countries had double-digit revenue growth, adjusting for currency. Revenues in the BRIC countries — Brazil, Russia, India and China — increased 4 percent. The estimated services backlog at September 30 was $138 billion, up 1 percent year over year at actual rates (up 1 percent, adjusting for currency). Revenues from the Software segment were $5.8 billion, down 1 percent compared with the third quarter of 2011. Software pre-tax income increased 6 percent and pre-tax margin increased to 35.6 percent. Revenues from IBM's key middleware products, which include WebSphere, Information Management, Tivoli, Lotus and Rational products, were $3.6 billion, down 1 percent. Revenues from the Systems and Technology segment totaled $3.9 billion for the quarter, down 13 percent from the third quarter of 2011. Excluding Retail Store Solutions (RSS), revenues were down 11 percent.
