Enterprise financial report

In 2020, Q4 IBM’s revenue will reach US $20.4 billion, and its net profit will drop by 66% year on year From IBM financial report

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The following is the In 2020, Q4 IBM’s revenue will reach US $20.4 billion, and its net profit will drop by 66% year on year From IBM financial report recommended by recordtrend.com. And this article belongs to the classification: Enterprise financial report.

IBM today released its fourth quarter and full year results for fiscal year 2020. According to the report, IBM’s revenue in the fourth quarter was US $20.367 billion, down 6% compared with us $21.777 billion in the same period of last year, with a year-on-year decrease of 8% excluding the impact of exchange rate changes; its profit from continuing operations was US $1.264 billion, down 66% compared with us $3.669 billion in the same period of last year;

Operating profit from continuing operations was $1.9 billion, down 56% from a year earlier, not in accordance with U.S. GAAP. IBM’s adjusted earnings per share exceeded Wall Street analysts’ expectations in the fourth quarter, but its revenue was lower than expected, leading to a sharp drop of nearly 7% in its after hours share price.

Key performance indicators for the fourth quarter:

IBM’s net profit for the quarter ended December 31, 2020 was $1.356 billion, compared with $3.670 billion a year earlier. In the fourth quarter, IBM’s profit from continuing operations was US $1.264 billion, compared with us $3.669 billion in the same period of last year, a year-on-year decrease of 66%; diluted earnings per share was US $1.41, compared with us $4.11 in the same period of last year, a year-on-year decrease of 66%. IBM’s fourth quarter profit from discontinued operations was $92 million, compared with zero profit from discontinued operations a year earlier.

Not in accordance with U.S. GAAP, IBM’s fourth quarter operating net profit from continuing operations was $1.9 billion, down 56% from a year earlier; its operating diluted earnings per share from continuing operations was $2.07, down 56% from a year earlier, but this performance still exceeded analysts’ previous expectations. According to data provided by Yahoo Finance website, 12 analysts had expected IBM’s fourth quarter earnings per share to reach $1.79 on average.

IBM’s revenue in the fourth quarter was US $20.367 billion, down 6% from US $21.777 billion in the same period last year. Excluding the impact of exchange rate changes, IBM’s revenue fell 8% year on year, which was less than analysts had expected. According to data provided by Yahoo Finance website, 11 analysts had expected IBM’s fourth quarter revenue to reach $20.67 billion on average.

IBM’s gross profit margin from continuing operations in the fourth quarter was 51.7%, up 0.7 percentage points from a year earlier. Not in accordance with U.S. GAAP, IBM’s gross profit margin from continuing operations in the fourth quarter was 52.5%, up 0.7 percentage points from a year earlier.

Fourth quarter costs and expenses:

In the fourth quarter, IBM’s total expenditure and other revenue from continuing operations was $9.234 billion, up from $7.107 billion in the same period last year. Among them, the expenditure on sales, general affairs and administration was US $7.232 billion, up from US $5.433 billion in the same period of last year; the expenditure on R & D and engineering was US $1.611 billion, up from US $1.596 billion in the same period of last year; the income from intellectual property and customs development was US $173 million, up from US $159 million in the same period of last year; the other expenditure was US $247 million, up from US $117 million in the same period of last year Interest expense was $317 million, compared with $354 million in the same period last year.

Results of departments in the fourth quarter:

In the fourth quarter of fiscal year 2020, the revenue of IBM cloud and cognitive software division was US $6.837 billion, down 4.5% compared with us $7.160 billion in the same period of last year. Excluding the impact of exchange rate changes, the revenue decreased 6.6% compared with the same period of last year. The gross profit margin was 79.8%, higher than 79.5% in the same period of last year.

IBM’s global business services division’s revenue in the fourth quarter was US $4.170 billion, down 2.7% from US $4.285 billion in the same period of last year, with a year-on-year decrease of 5.2% excluding the impact of exchange rate changes; its gross profit margin was 30.1%, higher than 27.6% in the same period of last year.

In the fourth quarter, IBM’s global technology service revenue was US $6.568 billion, down 5.5% compared with us $6.949 billion in the same period of last year, with a year-on-year decrease of 7.8% excluding the impact of exchange rate changes; its gross profit margin was 35.9%, higher than 35.2% in the same period of last year.

In the fourth quarter, IBM’s system division (including system hardware and operating system software business) revenue was US $2.501 billion, down 17.8% compared with us $3.042 billion in the same period of last year; excluding the impact of exchange rate changes, it was down 19.4% compared with the same period of last year; its gross profit margin was 59.9%, higher than 56.0% in the same period of last year.

In the fourth quarter, the revenue of IBM’s global financing department (including financing and second-hand equipment sales business) was 286 million US dollars, down 4.8% compared with 301 million US dollars in the same period of last year. Excluding the impact of exchange rate changes, it was 6.0% lower than the same period of last year. The gross profit rate was 33.8%, lower than 35.6% in the same period of last year.

IBM’s other income in the fourth quarter was $6 million, compared with $40 million in the same period last year.

Fy2020 results:

In the whole fiscal year 2020, IBM’s net profit was $5.590 billion, compared with $9.431 billion in fiscal year 2019. IBM’s profit from continuing operations for the whole year was US $5.501 billion, down 42% from US $9.435 billion in fy2019, and its diluted earnings per share was US $6.13, down 42% from US $10.57 in fy2019. Not in accordance with U.S. GAAP, IBM’s annual net profit from continuing operations was $7.8 billion, a decrease of 32% compared with fiscal year 2019; its diluted earnings per share from continuing operations was $8.67, a decrease of 32% compared with fiscal year 2019.

IBM’s annual revenue was US $73.620 billion, down 5% compared with us $77.147 billion in fy2019. Excluding the impact of divested business and exchange rate changes, IBM’s revenue decreased 4% year on year.

IBM’s total gross profit rate for the whole year was 48.3%, up 1.0% compared with the fiscal year of 2019; not in accordance with the U.S. general accounting standards, IBM’s total gross profit rate for the whole year was 49.3%, up 1.3% compared with the fiscal year of 2019.

Other financial information:

In the fourth quarter, IBM’s net cash from operating activities was $5.9 billion, and its accounts receivable excluding global financing was $6.8 billion. IBM’s free cash flow was $6.1 billion in the fourth quarter. In the fourth quarter, IBM returned $1.5 billion in cash to shareholders in the form of dividends.

Throughout the fiscal year 2020, IBM’s net cash from operating activities was $18.2 billion and its accounts receivable excluding global financing was $13.8 billion. IBM’s annual net capital expenditure was US $3 billion, an increase of US $700 million compared with fy2019, mainly due to the construction of cloud infrastructure. IBM’s free cash flow for the year was $10.8 billion. Throughout the fiscal year 2020, IBM returned $5.8 billion in cash to shareholders in the form of dividends.

By the end of the fourth quarter of 2020, IBM had $14.3 billion in cash, including marketable securities, an increase of $5.3 billion compared with the end of 2019; total debt (including $21.2 billion in global financing) was $61.5 billion, a decrease of $3.9 billion compared with the end of the third quarter, and a decrease of $11.5 billion since the completion of the red hat acquisition.

Performance Outlook:

IBM expects revenue growth for the full year of 2021 based on current exchange rates. IBM also expects adjusted free cash flow for the full year of 2021 to reach $11 billion to $12 billion, excluding the $3 billion cash impact of the company’s structural actions launched in the fourth quarter of 2020 and the transaction costs associated with separating the hosting infrastructure services business.

Stock price reaction:

IBM shares rose $1.57, or 1.21%, to close at $131.65 in regular trading on the New York Stock Exchange. IBM shares fell $9.08, or 6.89%, to $122.72 in after hours trading, which ended at 4:45 p.m. EST on Thursday (5:45 a.m. Beijing time on Friday). In the past 52 weeks, IBM’s highest price was $158.75 and its lowest price was $90.56.

More reading: IBM financial report: Q4 in 2019, IBM net profit 3.67 billion, up 88.1% year on year IBM financial report: Q2 in 2019, IBM revenue 19.2 billion, down 4.2% year on year IBM financial report: Q2 in 2020, IBM net profit 1.361 billion, down 45.5% year on year IBM financial report: Q1 in 2019, IBM net profit 1.59 billion, down 5% year on year IBM financial report: Q1 in 2016, IBM net profit 2.014 billion, down 13.5% year on year IBM financial report: Q4 in 2015 IBM’s net profit was $4.5 billion, down 19% on a year-on-year basis. IBM financial report: in Q1 2015, IBM’s revenue was $19.6 billion, down 12% on a year-on-year basis. IBM financial report: in Q3 2013, IBM’s revenue was $23.72 billion, down 4.1% on a year-on-year basis. IBM financial report: in Q2 2015, IBM’s net profit was $3.45 billion, down 17% on a year-on-year basis. IBM financial report: in Q4 2014, IBM’s net profit was $5.5 billion, down 11% on a year-on-year basis Year on year sharp drop of 99.6% IBM financial report: 2016 Q3 IBM net profit of $2.853 billion, year-on-year decline of 3.3% IBM financial report: 2016 Q2 IBM total revenue of $20.238 billion, 17 consecutive quarters of decline IBM financial report: 2012 Q3 IBM revenue of $24.7 billion, year-on-year decline of 5.4% IBM financial report: 2012 Q2 IBM achieved revenue of $25.8 billion, net profit of $3.9 billion

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