IBM Reports 2017 First-Quarter Results

April 20, 2017

ARMONK, N.Y., April 20, 2017 — IBM (NYSE: IBM) today announced first-quarter earnings results.

Highlights

• Diluted EPS from continuing operations: GAAP of $1.85; Operating (non-GAAP) of $2.38
• Revenue from continuing operations of $18.2 billion
• Strategic imperatives revenue of $7.8 billion in the quarter, up 12 percent (up 13 percent adjusting for currency)
• Strategic imperatives revenue of $33.6 billion over the last 12 months represents 42 percent of IBM revenue
• Cloud revenue of $14.6 billion over the last 12 months
— Cloud as-a-Service annual exit run rate of $8.6 billion in the quarter, up 59 percent year to year (up 61 percent adjusting for currency)
• Maintains full-year EPS and free cash flow expectations.

“In the first quarter, both the IBM Cloud and our cognitive solutions again grew strongly, which fueled robust performance in our strategic imperatives,” said Ginni Rometty, IBM chairman, president and chief executive officer.  “In addition, we are developing and bringing to market emerging technologies such as blockchain and quantum, revolutionizing how enterprises will tackle complex business problems in the years ahead.”

FIRST QUARTER 2017
Diluted EPS Net Income Gross Profit Margin
GAAP from Continuing Operations $1.85 $1.8B 42.8%
   Year/Year -11% -13% -3.7Pts
Operating (Non-GAAP) $2.38 $2.3B 44.5%
   Year/Year 1% -1% -3.0Pts
REVENUE Total IBM Strategic Imperatives Cloud
As reported (US$) $18.2B $7.8B $3.5B
   Year/Year -3% 12% 33%
   Year/Year adjusting for currency -2% 13% 35%

“We continued to make investments in the first quarter to expand our cognitive and cloud platform and we increased our research and development spending,” said Martin Schroeter, IBM senior vice president and chief financial officer.  “At the same time we returned more than $2.6 billion to shareholders through dividends and gross share repurchases.”

Strategic Imperatives

First-quarter cloud revenues increased 33 percent (up 35 percent adjusting for currency) to $3.5 billion.  Cloud revenue over the last 12 months was $14.6 billion.  The annual exit run rate for cloud as-a-service revenue increased to $8.6 billion from $5.4 billion in the first quarter of 2016.  Revenues from analytics increased 6 percent (up 7 percent adjusting for currency).  Revenues from mobile increased 20 percent (up 22 percent adjusting for currency) and revenues from security increased 9 percent (up 10 percent adjusting for currency).

Full-Year 2017 Expectations

The company continues to expect operating (non-GAAP) diluted earnings per share of at least $13.80 and GAAP diluted earnings per share of at least $11.95.  Operating (non-GAAP) diluted earnings per share exclude $1.85 per share of charges for amortization of purchased intangible assets, other acquisition-related charges and retirement-related charges.  IBM continues to expect free cash flow to be relatively flat year to year.

Cash Flow and Balance Sheet

In the first quarter, the company generated net cash from operating activities of $4.0 billion, or $1.9 billion excluding Global Financing receivables.  IBM’s free cash flow was $1.1 billion, down year to year consistent with the amount of the Japan tax refund received in the first quarter of 2016.  IBM returned $1.3 billion in dividends and $1.3 billion of gross share repurchases to shareholders.  At the end of March 2017, IBM had $3.8 billion remaining in the current share repurchase authorization.

IBM ended the first quarter of 2017 with $10.7 billion of cash on hand.  Debt, including Global Financing debt of $28.5 billion, totaled $42.8 billion.  Core (non-Global Financing) debt totaled $14.3 billion.  The balance sheet remains strong and is well positioned to support the business over the long term.

Segment Results for First Quarter

  • Cognitive Solutions (includes Solutions Software and Transaction Processing Software) — revenues of $4.1 billion, up 2.1 percent (up 2.8 percent adjusting for currency) were driven by growth in analytics and security, which include Watson-related offerings.
  • Global Business Services (includes Consulting, Global Process Services and Application Management) — revenues of $4.0 billion, down 3.0 percent (down 1.9 percent adjusting for currency).  Strategic imperatives grew double digits led by the cloud and mobile practices.
  • Technology Services & Cloud Platforms (includes Infrastructure Services, Technical Support Services and Integration Software) — revenues of $8.2 billion, down 2.5 percent (down 2.0 percent adjusting for currency) with strong growth in strategic imperatives driven by hybrid cloud services.
  • Systems (includes Systems Hardware and Operating Systems Software) — revenues of $1.4 billion, down 16.8 percent (down 16.1 percent adjusting for currency).
  • Global Financing (includes financing and used equipment sales) — revenues of $405 million, down 1.2 percent (down 2.1 percent adjusting for currency).

Tax Rate

For the first quarter, IBM’s ongoing effective GAAP tax rate was approximately 12 percent. The ongoing effective operating (non-GAAP) tax rate was approximately 15 percent, which is within the expected range of 15 percent plus or minus 3 points provided earlier this year.  IBM’s reported tax rates include the effect from a discrete tax benefit disclosed earlier this year.


Source: IBM

Subscribe to HPCwire's Weekly Update!

Be the most informed person in the room! Stay ahead of the tech trends with industy updates delivered to you every week!

Dell EMC will Build OzStar – Swinburne’s New Supercomputer to Study Gravity

August 16, 2017

Dell EMC announced yesterday it is building a new supercomputer – the OzStar – for the Swinburne University of Technology (Australia) in support the ARC Centre of Excellence for Gravitational Wave Discovery (OzGrav) Read more…

By John Russell

Microsoft Bolsters Azure With Cloud HPC Deal

August 15, 2017

Microsoft has acquired cloud computing software vendor Cycle Computing in a move designed to bring orchestration tools along with high-end computing access capabilities to the cloud. Terms of the acquisition were not Read more…

By George Leopold

HPE Ships Supercomputer to Space Station, Final Destination Mars

August 14, 2017

With a manned mission to Mars on the horizon, the demand for space-based supercomputing is at hand. Today HPE and NASA sent the first off-the-shelf HPC system into space aboard the SpaceX Dragon Spacecraft to explore if Read more…

By Tiffany Trader

HPE Extreme Performance Solutions

Leveraging Deep Learning for Fraud Detection

Advancements in computing technologies and the expanding use of e-commerce platforms have dramatically increased the risk of fraud for financial services companies and their customers. Read more…

AMD EPYC Video Takes Aim at Intel’s Broadwell

August 14, 2017

Let the benchmarking begin. Last week, AMD posted a YouTube video in which one of its EPYC-based systems outperformed a ‘comparable’ Intel Broadwell-based system on the STREAM benchmark and on a test case running ANS Read more…

By John Russell

Microsoft Bolsters Azure With Cloud HPC Deal

August 15, 2017

Microsoft has acquired cloud computing software vendor Cycle Computing in a move designed to bring orchestration tools along with high-end computing access capa Read more…

By George Leopold

HPE Ships Supercomputer to Space Station, Final Destination Mars

August 14, 2017

With a manned mission to Mars on the horizon, the demand for space-based supercomputing is at hand. Today HPE and NASA sent the first off-the-shelf HPC system i Read more…

By Tiffany Trader

AMD EPYC Video Takes Aim at Intel’s Broadwell

August 14, 2017

Let the benchmarking begin. Last week, AMD posted a YouTube video in which one of its EPYC-based systems outperformed a ‘comparable’ Intel Broadwell-based s Read more…

By John Russell

Deep Learning Thrives in Cancer Moonshot

August 8, 2017

The U.S. War on Cancer, certainly a worthy cause, is a collection of programs stretching back more than 40 years and abiding under many banners. The latest is t Read more…

By John Russell

IBM Raises the Bar for Distributed Deep Learning

August 8, 2017

IBM is announcing today an enhancement to its PowerAI software platform aimed at facilitating the practical scaling of AI models on today’s fastest GPUs. Scal Read more…

By Tiffany Trader

IBM Storage Breakthrough Paves Way for 330TB Tape Cartridges

August 3, 2017

IBM announced yesterday a new record for magnetic tape storage that it says will keep tape storage density on a Moore's law-like path far into the next decade. Read more…

By Tiffany Trader

AMD Stuffs a Petaflops of Machine Intelligence into 20-Node Rack

August 1, 2017

With its Radeon “Vega” Instinct datacenter GPUs and EPYC “Naples” server chips entering the market this summer, AMD has positioned itself for a two-head Read more…

By Tiffany Trader

Cray Moves to Acquire the Seagate ClusterStor Line

July 28, 2017

This week Cray announced that it is picking up Seagate's ClusterStor HPC storage array business for an undisclosed sum. "In short we're effectively transitioning the bulk of the ClusterStor product line to Cray," said CEO Peter Ungaro. Read more…

By Tiffany Trader

Nvidia’s Mammoth Volta GPU Aims High for AI, HPC

May 10, 2017

At Nvidia's GPU Technology Conference (GTC17) in San Jose, Calif., this morning, CEO Jensen Huang announced the company's much-anticipated Volta architecture a Read more…

By Tiffany Trader

How ‘Knights Mill’ Gets Its Deep Learning Flops

June 22, 2017

Intel, the subject of much speculation regarding the delayed, rewritten or potentially canceled “Aurora” contract (the Argonne Lab part of the CORAL “ Read more…

By Tiffany Trader

Reinders: “AVX-512 May Be a Hidden Gem” in Intel Xeon Scalable Processors

June 29, 2017

Imagine if we could use vector processing on something other than just floating point problems.  Today, GPUs and CPUs work tirelessly to accelerate algorithms Read more…

By James Reinders

Nvidia Responds to Google TPU Benchmarking

April 10, 2017

Nvidia highlights strengths of its newest GPU silicon in response to Google's report on the performance and energy advantages of its custom tensor processor. Read more…

By Tiffany Trader

Quantum Bits: D-Wave and VW; Google Quantum Lab; IBM Expands Access

March 21, 2017

For a technology that’s usually characterized as far off and in a distant galaxy, quantum computing has been steadily picking up steam. Just how close real-wo Read more…

By John Russell

Russian Researchers Claim First Quantum-Safe Blockchain

May 25, 2017

The Russian Quantum Center today announced it has overcome the threat of quantum cryptography by creating the first quantum-safe blockchain, securing cryptocurrencies like Bitcoin, along with classified government communications and other sensitive digital transfers. Read more…

By Doug Black

HPC Compiler Company PathScale Seeks Life Raft

March 23, 2017

HPCwire has learned that HPC compiler company PathScale has fallen on difficult times and is asking the community for help or actively seeking a buyer for its a Read more…

By Tiffany Trader

Trump Budget Targets NIH, DOE, and EPA; No Mention of NSF

March 16, 2017

President Trump’s proposed U.S. fiscal 2018 budget issued today sharply cuts science spending while bolstering military spending as he promised during the cam Read more…

By John Russell

Leading Solution Providers

CPU-based Visualization Positions for Exascale Supercomputing

March 16, 2017

In this contributed perspective piece, Intel’s Jim Jeffers makes the case that CPU-based visualization is now widely adopted and as such is no longer a contrarian view, but is rather an exascale requirement. Read more…

By Jim Jeffers, Principal Engineer and Engineering Leader, Intel

Groq This: New AI Chips to Give GPUs a Run for Deep Learning Money

April 24, 2017

CPUs and GPUs, move over. Thanks to recent revelations surrounding Google’s new Tensor Processing Unit (TPU), the computing world appears to be on the cusp of Read more…

By Alex Woodie

Google Debuts TPU v2 and will Add to Google Cloud

May 25, 2017

Not long after stirring attention in the deep learning/AI community by revealing the details of its Tensor Processing Unit (TPU), Google last week announced the Read more…

By John Russell

MIT Mathematician Spins Up 220,000-Core Google Compute Cluster

April 21, 2017

On Thursday, Google announced that MIT math professor and computational number theorist Andrew V. Sutherland had set a record for the largest Google Compute Engine (GCE) job. Sutherland ran the massive mathematics workload on 220,000 GCE cores using preemptible virtual machine instances. Read more…

By Tiffany Trader

Six Exascale PathForward Vendors Selected; DoE Providing $258M

June 15, 2017

The much-anticipated PathForward awards for hardware R&D in support of the Exascale Computing Project were announced today with six vendors selected – AMD Read more…

By John Russell

Top500 Results: Latest List Trends and What’s in Store

June 19, 2017

Greetings from Frankfurt and the 2017 International Supercomputing Conference where the latest Top500 list has just been revealed. Although there were no major Read more…

By Tiffany Trader

IBM Clears Path to 5nm with Silicon Nanosheets

June 5, 2017

Two years since announcing the industry’s first 7nm node test chip, IBM and its research alliance partners GlobalFoundries and Samsung have developed a proces Read more…

By Tiffany Trader

Messina Update: The US Path to Exascale in 16 Slides

April 26, 2017

Paul Messina, director of the U.S. Exascale Computing Project, provided a wide-ranging review of ECP’s evolving plans last week at the HPC User Forum. Read more…

By John Russell

  • arrow
  • Click Here for More Headlines
  • arrow
Share This