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IBM ANNOUNCES 1992 FINANCIAL RESULTS

 ARMONK, N.Y., Jan. 19 /PRNewswire/ -- 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 Reported
 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
 -0- 1/19/93
 /CONTACT: Rob Wilson of IBM, 914-765-6565/
 (IBM)


CO: International Business Machines Corp. ST: New York IN: CPR SU: ERN

SH -- NY013 -- 6168 01/19/93 09:20 EST
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