"Our results demonstrate that clients see IBM and Red Hat as a powerful combination and they trust us to provide them with the open hybrid cloud technology, innovation and industry expertise to help them shift their mission-critical workloads to the cloud.”Intellectual property and custom development incomeLong-term financing receivables, net* Reflects the adoption of the FASB guidance on leases.Divestitures, net of cash transferredIncome / (Loss) from discontinued operations, net of taxesPrepaid expenses and other current assetsIn an effort to provide investors with additional information regarding the company’s results as determined by generally accepted accounting principles (GAAP), the company has also disclosed in this press release the following non-GAAP information, which management believes provides useful information to investors:Acquisitions, net of cash acquiredIBM continues to expect free cash flow of approximately $12 billion, with a realization rate over 100 percent of GAAP Net Income._________________________________Debt, net of payments & proceedsDepreciation/Amortization of IntangiblesOther (includes GF Net Receivables and GF Debt)Accumulated other comprehensive income/(loss)On August 2, 2019, the company updated full-year expectations to reflect the impact of the Red Hat acquisition and related activities.
IBM expects GAAP diluted earnings per share for the full year to be at least $10.58. Except as required by law, the company assumes no obligation to update or revise any forward-looking statements.The rationale for management’s use of these non-GAAP measures is included in Exhibit 99.2 in the Form 8‑K that includes this press release and is being submitted today to the SEC.Short-term financing receivables, netProvision for / (Benefit from) income taxesImpact from divested businessesCommon Stock Transactions - Other“We continued our focus on the strength of our balance sheet in the third quarter," said James Kavanaugh, IBM senior vice president and chief financial officer. Consolidated diluted earnings per share was $6.45 compared to $7.37, down 12 percent year to year. The company continues to expect operating (non-GAAP) diluted earnings per share of at least $12.80.
Operating (non-GAAP) net income for the nine months ended September 30, 2019 was $7.2 billion compared with $8.2 billion in the prior-year period, a decrease of 12 percent.
IBM Australia revenue dropped by over AU$300m in 2019. Revenues for the nine-month period ended September 30, 2019 totaled $55.4 billion, a decrease of 4 percent year to year (down 0.7 percent adjusting for divested businesses and currency) compared with $57.8 billion for the first nine months of 2018. While Western Europe and Asia Pacific showed a pickup in client spending during June, U.S. and Latin America customers pulled back as the pandemic impact got worse, Kavanaugh said.Revenue from the cloud business, previously headed by Krishna, rose 30% to $6.3 billion in the second quarter.IBM’s total revenue fell 5.4% to $18.12 billion, but came in above analysts’ estimates of $17.72 billion, according to IBES data from Refinitiv. IBM annual revenue decreased from $79.6 billion in 2018 to $77.1 billion in 2019, a 3.1% decrease. Any forward-looking statement in this release speaks only as of the date on which it is made. Clients want to modernize apps, move more workloads to the cloud and automate IT tasks,” IBM’s new boss Arvind Krishna said on a post-earnings call with analysts.IBM’s global business services unit was impacted as clients cut or delayed spending on discretionary projects due to COVID-19, CFO James Kavanaugh told Reuters.
IBM’s total revenue fell 5.4% to $18.12 billion, but came in above analysts’ estimates of $17.72 billion, according to IBES data from Refinitiv.
Sales in the unit fell 7% to $3.9 billion.The company’s shares rose 5% in after-hours trading.Excluding items, the company earned $2.18 per share, above estimates of $2.07.IBM has jettisoned some of its legacy business to focus on the high-margin cloud computing business, an area that has seen a lot of action in recent years as companies ramp up their digital shift to boost efficiency. IBM returned $1.6 billion to shareholders through $1.4 billion in dividends and $0.1 billion in gross share repurchases. Debt, including Global Financing debt of $23.1 billion, totaled $66.3 billion – down $6.7 billion since the end of the second quarter.Strong Performance by Red Hat Accelerates Cloud Revenue GrowthLess: change in Global Financing (GF) ReceivablesNotes and accounts receivable - trade, net