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SUBJECT: IBM ANNOUNCES 1992 FINANCIAL RESULTS
SOURCE: PR Newswire via First! by INDIVIDUAL, Inc.
DATE: January 19, 1993
INDEX: [1]
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ARMONK, N.Y., Jan. 19 /PRNewswire/ via First! -- IBM (NYSE: IBM) today
reported preliminary worldwide financial results for 1992. IBM's revenue
and earnings declined in the fourth quarter and full year compared with the
same periods of 1991.
IBM Chairman John F. Akers said, "Our financial results are not acceptable
to us or our shareholders. We are taking aggressive actions to improve our
competitiveness and profitability by addressing the accelerating changes
that are sweeping our industry, while adjusting for weakened business
conditions throughout the world. These actions include reallocating
resources to growth businesses, increasing the autonomy of our businesses,
and reducing costs."
Mr. Akers emphasized that the company's strategy is based on:
-- Intensifying the focus on key growth areas. The company's
manufacturing and development businesses have increased their focus on
clearly defined product segments. IBM continues to increase investment in
growth areas such as client-server computing, networking, RISC technology
and multimedia, which will keep IBM at the forefront of technological
development in these and other markets. IBM's marketing and services units
are dedicating additional resources to a broad range of growth areas,
including consulting, systems integration, and services. IBM's revenue from
sources other than hardware sales amounted to about 48 percent of total
revenues in 1992 compared with approximately 43 percent in 1991.
-- Encouraging the autonomy of individual business units. IBM's creation
of increasingly independent business units has allowed for greater
flexibility in pursuing market opportunities and in meeting quality and
customer satisfaction objectives. For example, the IBM Personal Computer
Company, which gained additional operating autonomy last fall, introduced a
fully revamped product line and shipped more units worldwide in the fourth
quarter than in any previous quarter in IBM's history.
-- Further reducing costs. IBM reduced its work force by more than 40,000
employees in 1992. Through 1992, IBM has trimmed its work force by more
than 100,000 since 1986 -- eliminating layers of management, reducing
support staff, and moving more people into revenue-producing jobs. These
efforts have led to a reduction in IBM's operating expenses. The company
recently announced plans for additional work force reductions of about
25,000 in 1993. Capacity reductions for 1993, primarily in businesses
related to large systems, will result in a better balance between
manufacturing capacity and marketplace demand.
Mr. Akers said, "Difficult problems remain ahead for IBM, including the
continued pace of change in our industry and weak worldwide business
environments. Nevertheless, we are confident that we are on the right path
and our efforts to redirect our resources to growth opportunities, unleash
our business units, and continue our restructuring will produce a more
competitive and successful IBM."
IBM's 1992 earnings include charges for capacity and work force reduction
actions that amount to $11.6 billion, before taxes, in the year and $7.2
billion, before taxes, in the fourth quarter. In 1991, restructuring
charges of $3.7 billion, before taxes, were taken.
Worldwide revenue for the year ended Dec. 31, 1992, was $64.52 billion,
down .4 percent from the prior year's $64.77 billion. Worldwide net earnings
before capacity and work force reduction charges and the cumulative effect
of Statement of Financial Accounting Standards (SFAS 109), "Accounting for
Income Taxes," were $1.42 billion ($2.48 per share). After the effect of
charges taken in both years, but before the cumulative effect of the
adoption of accounting changes taken in 1992 and 1991, net earnings were
negative $6.87 billion ($12.03 per share) in 1992, compared with negative
$598 million ($1.05 per share) in 1991. After the cumulative effects of the
adoption of accounting changes, net earnings in 1992 were negative $4.97
billion ($8.70 per share) compared with negative $2.86 billion ($5.01 per
share) in 1991. Average shares outstanding were 570.9 million in 1992 and
572.0 million in 1991.
For the quarter ended Dec. 31, 1992, worldwide revenue was $19.56 billion,
an 11.0 percent decrease compared with $21.97 billion for the fourth quarter
of 1991. Net earnings without the effect of the capacity and work force
reduction charges would have been negative $45 million ($.08 per share).
With the effect of the charges, net earnings were negative $5.46 billion
($9.57 per share). Fourth-quarter 1991 net earnings, after restructuring
charges, were negative $1.46 billion ($2.55 per share).
Revenue from non-U.S. operations in 1992, included in the consolidated
results, was $39.89 billion, a decline of 1.1 percent from $40.34 billion in
1991. Non-U.S. net earnings after the effects of restructuring charges,
taxes, and the cumulative effects of the adoption of accounting changes were
negative $560 million in 1992 compared with $1.79 billion in 1991.
INTERNATIONAL BUSINESS MACHINE CORPORATION
Comparative Preliminary Financial Results
(In millions except per-share amounts)
Periods ended Twelve months Percent
Dec. 31 Increase
1992 1991(B) (Decrease)
Revenue:
Sales $ 33,755 $ 37,093 (9.0)
Software 11,103 10,498 5.8
Maintenance 7,635 7,414 3.0
Services 7,352 5,582 31.7
Rentals and financing 4,678 4,179 11.9
64,523 64,766 (0.4)
Costs and expenses(C) 72,762 63,827 14.0
Operating income (8,239) 939 --
Other income 573 602 (4.9)
Interest expense 1,360 1,423 (4.4)
Earnings before income taxes (9,026) 118 --
Provision for income taxes (2,161) 716 --
Earnings before effect of
changes in accounting
principles (6,865) (598) --
Effect of changes in
accounting principles* 1,900 (2,263) --
Net earnings $ (4,965) $ (2,861) --
Per-share amounts:
Before effect of changes
in accounting principles $ (12.03) $ (1.05) --
Effect of changes in
accounting principles* 3.33 (3.96) --
Net earnings $ (8.70) $ (5.01) --
Average number of
shares outstanding 570.9 572.0
(A) 1992 cumulative effect of Statement of Financial Accounting Standards
(SFAS) 109, "Accounting for Income Taxes," and 1991 transition effect of
SFAS 106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions."
(B) Results in 1991 have been restated for the AICPA Statement of
Position, "Software Revenue Recognition."
(C) Results in 1992 and 1991 include $11.6 billion and $3.7 billion,
before taxes, respectively, for capacity and work force reduction actions.
INTERNATIONAL BUSINESS MACHINES CORPORATION
Comparative Preliminary Financial Results
(In millions except per-share amounts)
Periods ended Three months Percent
Dec. 31 Increase
1992 1991(A) (Decrease)
Revenue:
Sales $ 10,966 $ 13,718 (20.1)
Software 3,189 3,254 (2.0)
Maintenance 1,903 1,913 (0.5)
Services 2,396 2,049 17.0
Rentals and financing 1,106 1,034 7.0
19,560 21,968 (11.0)
Costs and expenses(B) 26,315 23,065 14.1
Operating income (6,755) (1,097) --
Other income 171 178 (4.6)
Interest expense 364 448 (18.5)
Earnings before income taxes (6,948) (1,367) --
Provision for income taxes (1,485) 90 --
Net earnings $ (5,463) $ (1,457) --
Per-share $ (9.57) $ (2.55) --
Average number of
shares outstanding 570.9 571.6
(A) Results in 1991 have been restated for the AICPA Statement of
Position, "Software Revenue Recognition."
(B) Results in 1992 and 1991 include $7.2 billion and $3.4 billion, before
taxes, respectively, for capacity and work force reduction actions.
INTERNATIONAL BUSINESS MACHINES CORPORATION
Revenue - Earnings
(In millions except per-share amounts)
Percent
Increase
1992(B) 1991(A) (Decrease)
Revenue
1st Quarter $ 14,037 $ 13,587 3.3
2nd Quarter 16,224 14,764 9.9
6 Months 30,261 28,351 6.7
3rd Quarter 14,702 14,447 1.8
9 Months 44,963 42,798 5.1
4th Quarter 19,560 21,968 (11.0)
Year 64,523 64,766 (0.4)
Earnings Before
Income Taxes
1st Quarter 991 927 6.9
2nd Quarter 1,217 237 413.8
6 Months 2,208 1,164 89.7
3rd Quarter (4,286) 321 --
9 Months (2,078) 1,485 --
4th Quarter (6,948) (1,367) --
Year (9,026) 118 --
Net Earnings
1st Quarter 2,542 (1,707) --
2nd Quarter 734 126 483.1
6 Months 3,276 (1,581) --
3rd Quarter (2,778) 177 --
9 Months 498 (1,404) --
4th Quarter (5,463) (1,457) --
Year (4,965) (2,861) --
Earnings-Per-Share
1st Quarter $ 4.45 $ (2.99) --
2nd Quarter 1.29 .22 486.4
6 Months 5.74 (2.77) --
3rd Quarter (4.87) .31 --
9 Months .87 (2.46) --
4th Quarter (9.57) (2.55) --
Year (8.70) (5.01) --
(A) First quarter and year-to-date net earnings and EPS reflect the effect
of the adoption of Statement of Financial Accounting Standards 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions."
Results include charges for work force reduction actions. Results have been
restated for the AICPA Statement of Position, "Software Revenue
Recognition."
(B) First quarter and year-to-date results reflect the effect of the
adoption of Statement of Financial Accounting Standards 109, "Accounting for
Income Taxes." Third-quarter results include charges of $4.4 billion before
taxes and fourth-quarter results include charges of $7.2 billion before
taxes, both for capacity and work force reduction actions.
INTERNATIONAL BUSINESS MACHINES CORPORATION
Supplemental schedule of 1992 preliminary financial results before and
after effects of capacity and work force reduction charges and one- time
effect of change in accounting principle:
Periods ended Twelve months
Dec. 31, 1992 (In millions except per-share amounts)
Before Total
Special Special As
Actions Actions Reported
Revenue:
Sales $ 33,755 $ $ 33,755
Software 11,103 11,103
Maintenance 7,635 7,635
Services 7,352 7,352
Rentals and financing 4,678 4,678
TOTAL 64,523 64,523
Costs and expenses 61,117 11,645 72,762
Operating income 3,406 (11,645) (8,239)
Other income 573 573
Interest expense 1,360 1,360
Earnings before income taxes 2,619 (11,645) (9,026)
Provision for income taxes 1,202 (3,363) (2,161)
Earnings before effect of
change in accounting
principle 1,417 (8,282) (6,865)
Effect of change in
accounting principle -- 1,900 1,900
Net earnings $ 1,417 $ (6,382) $ (4,965)
Per-share amounts:
Before effect of change
in accounting principle $ 2.48 $ (14.51) $ (12.03)
Effect of change in
accounting principle -- 3.33 3.33
Net earnings $ 2.48 $ (11.18) $ (8.70)
Average number of
shares outstanding 570.9 570.9 570.9
INTERNATIONAL BUSINESS MACHINES CORPORATION
(In millions except per-share amounts)
Supplemental schedule of 1992 preliminary financial results
before and after effects of capacity and work force reduction
charges:
Periods ended Three months
Dec. 31, 1992
Before Total
Special Special As
Actions Actions Report
ed
Revenue:
Sales $ 10,966 $ $ 10,966
Software 3,189 3,189
Maintenance 1,903 1,903
Services 2,396 2,396
Rentals and financing 1,106 1,106
19,560 19,560
Costs and expenses $ 19,102 7,213 26,315
Operating income 458 (7,213) (6,755)
Other income 171 171
Interest expense 364 364
Earnings before income taxes 265 (7,213) (6,948)
Provision for income taxes 310 (1,795) (1,485)
Net earnings $ (45) $ (5,418) $ (5,463)
Per-share $ (.08) $ (9.49) $ (9.57)
Average number of
shares outstanding 570.9 570.9 570.9
/CONTACT: Rob Wilson of IBM, 914-765-6565/ (IBM)
[01-19-93 at 09:20 EST, PR Newswire, File: p0119092.300]
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