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IBM STATEMENT ON THIRD-QUARTER AND NINE-MONTH FINANCIAL RESULTS

 IBM STATEMENT ON THIRD-QUARTER AND NINE-MONTH FINANCIAL RESULTS
 ARMONK, N.Y., Oct. 15 /PRNewswire/ -- IBM (NYSE: IBM) today reported worldwide financial results for the third quarter and nine months of 1992. IBM's revenue increased for the quarter and nine months, compared with the same periods of 1991, while earnings declined for the quarter and increased for the nine months.
 IBM Chairman John F. Akers said, "I'm disappointed by our third- quarter results. Our business was adversely affected by economic turmoil in Europe, particularly at the close of the quarter, and by persistent economic weakness in the United States and Japan. Our hardware profits continued to be hurt by price pressures, especially within our personal computer line. Software and services revenues grew and our expenses declined."
 IBM's third-quarter earnings include charges of $5.02 per share as a result of the capacity-reduction actions announced on Sept. 29, 1992, and the cost of additional work force reductions.
 For the quarter ended Sept. 30, 1992, worldwide revenue was $14.7 billion, a 1.8 percent increase compared with $14.4 billion for the third quarter of 1991. Net earnings without the effect of the capacity reduction and work force reduction charges would have been $86 million, or $.15 per share. With the effect of the charges, net earnings were negative $2.8 billion or negative $4.87 per share. Third-quarter 1991 net earnings were $177 million, or $.31 per share.
 Worldwide revenue for the nine months ended Sept. 30, 1992, was $45.0 billion, up 5.1 percent from the prior year's $42.8 billion. Worldwide net earnings before capacity and workforce reduction charges and the cumulative effect of Statement of Financial Accounting Standards 109 (SFAS 109), "Accounting for Income Taxes," were $1.5 billion, or $2.56 per share. After the effect of the charges, but before the cumulative effect of SFAS 109, net earnings were negative $1.4 billion or negative $2.46 per share compared with $859 million or $1.50 per share in 1991. After the cumulative effects of the adoption of accounting changes in 1992 and 1991, net earnings in 1992 were $498 million or $.87 per share compared with negative $1.4 billion or negative $2.46 per share in 1991. Average shares outstanding were 570.9 million in 1992 and 572.1 million in 1991.
 The implementation of SFAS 109, which concerns the treatment of deferred taxes, requires a restatement of IBM's first and second-quarter results. For the first quarter, this raises earnings per share before the cumulative effect of the change in accounting principle to $1.12 versus the $1.04 previously reported and to $1.29 for the second quarter versus the $1.25 previously reported. The cumulative one-time effect of this change was $1.9 billion, or $3.33 per share, and has been reflected in the first-quarter 1992 restated results of $4.45.
 INTERNATIONAL BUSINESS MACHINES CORPORATION
 (In millions except per-share amounts)
 Pct. Incr.
 Nine months ended Sept. 30 1992 1991(B) (Decrease)
 Revenue:
 Sales $ 22,789 $ 23,375 (2.5)
 Software 7,914 7,244 9.3
 Maintenance 5,732 5,501 4.2
 Services 4,956 3,533 40.2
 Rentals and financing 3,572 3,145 13.6
 Total 44,963 42,798 5.1
 Costs and expenses(C) 46,447 40,762 14.0
 Operating income (1,484) 2,036 --
 Other income 402 424 (5.1)
 Interest expense 996 975 2.1
 Earnings before income taxes (2,078) 1,485 --
 Provision for income taxes (676) 626 --
 Earnings before effect of
 changes in accounting
 principles (1,402) 859 --
 Effect of changes in
 accounting principles(A) 1,900 (2,263) --
 Net earnings $ 498 $ (1,404) --
 Per-share amounts:
 Before effect of changes
 in accounting principles $ (2.46) $ 1.50 --
 Effect of changes in
 accounting principles(A) 3.33 (3.96) --
 Net earnings $ .87 $ (2.46) --
 Average number of
 shares outstanding 570.9 572.1
 (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) -- Restated for the AICPA Statement of Position, "Software Revenue Recognition."
 (C) -- Results in 1992 include charges of $4.4 billion before taxes for capacity and work force reduction actions.
 INTERNATIONAL BUSINESS MACHINES CORPORATION
 Comparative financial results:
 (In millions except per-share amounts)
 Pct. Incr.
 Three months ended Sept. 30 1992 1991(A) (Decrease)
 Revenue:
 Sales $ 7,028 $ 7,797 (9.9)
 Software 2,738 2,462 11.3
 Maintenance 1,931 1,804 7.1
 Services 1,809 1,310 38.0
 Rentals and financing 1,196 1,074 11.3
 Total 14,702 14,447 1.8
 Costs and expenses(B) 18,743 13,845 35.4
 Operating income (4,041) 602 --
 Other income 90 67 35.1
 Interest expense 335 348 (3.8)
 Earnings before income taxes (4,286) 321 --
 Provision for income taxes (1,508) 144 --
 Net earnings $ (2,778) $ 177 --
 Per-share $ (4.87) $ .31 --
 Average number of
 shares outstanding 570.8 571.9
 (A) -- Restated for the AICPA Statement of Position, "Software Revenue Recognition."
 (B) -- Results in 1992 include charges of $4.4 billion before taxes for capacity and work force reduction actions.
 INTERNATIONAL BUSINESS MACHINES CORPORATION
 Revenue - Earnings
 (In millions except per-share amounts)
 1992(B) 1991(A) Percent Increase
 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 21,968
 Year 64,766
 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 (1,367)
 Year 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 (1,457)
 Year (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 (2.55)
 Year (5.01)
 (A) -- 1991 first-quarter and year-to-date results reflect the effect of the adoption of Statement of Financial Accounting Standards 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions." Results for 1991 have been restated for the AICPA Statement of Position, "Software Revenue Recognition."
 (B) -- 1992 first and second-quarter and year-to-date results have been restated to reflect the effect of the adoption of Statement of Financial Accounting Standards 109, "Accounting for Income Taxes." Also, third-quarter and year-to-date results include charges of $4.4 billion before taxes for capacity reduction and work force reduction actions.
 INTERNATIONAL BUSINESS MACHINES CORPORATION
 Supplemental schedule of 1992 financial results before and after
 effects of capacity and work force reduction charges and
 one-time effect of change in accounting principle:
 (In millions except per-share amounts)
 Nine months ended Sept. 30, 1992 Before Total
 Special Special As
 Actions Actions Reported
 Revenue:
 Sales $ 22,789 $ $ 22,789
 Software 7,914 7,914
 Maintenance 5,732 5,732
 Services 4,956 4,956
 Rentals and financing 3,572 3,572
 Total 44,963 44,963
 Costs and expenses 42,015 4,432 46,447
 Operating income 2,948 (4,432) (1,484)
 Other income 402 402
 Interest expense 996 996
 Earnings before income taxes 2,354 (4,432) (2,078)
 Provision for income taxes 892 (1,568) (676)
 Earnings before effect of
 change in accounting
 principle 1,462 (2,864) (1,402)
 Effect of change in
 accounting principle 1,900 1,900
 Net earnings $ 1,462 $ ( 964) $ 498
 Per-share amounts:
 Before effect of change
 in accounting principle $ 2.56 $ (5.02) $ (2.46)
 Effect of change in
 accounting principle 3.33 3.33
 Net earnings $ 2.56 $ (1.69) $ .87
 Average number of
 shares outstanding 570.9 570.9 570.9
 INTERNATIONAL BUSINESS MACHINES CORPORATION
 Supplemental schedule of 1992 financial results before and after
 effects of capacity and work force reduction charges:
 (In millions except per-share amounts)
 Three months ended Sept. 30, 1992 Before Total
 Special Special As
 Actions Actions Reported
 Revenue:
 Sales $ 7,028 $ $ 7,028
 Software 2,738 2,738
 Maintenance 1,931 1,931
 Services 1,809 1,809
 Rentals and financing 1,196 1,196
 Total 14,702 14,702
 Costs and expenses 14,311 4,432 18,743
 Operating income 391 (4,432) (4,041)
 Other income 90 90
 Interest expense 335 335
 Earnings before income taxes 146 (4,432) (4,286)
 Provision for income taxes 60 (1,568) (1,508)
 Net earnings $ 86 $ (2,864) $ (2,778)
 Per-share $ .15 $ (5.02) $ (4.87)
 Average number of
 shares outstanding 570.8 570.8 570.8
 -0- 10/15/92
 /CONTACT: Rob Wilson of IBM, 914-765-6565/
 (IBM) CO: International Business Machines Corp. ST: New York IN: SU: ERN


TS -- NY008 -- 0216 10/15/92 08:40 EDT
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Date:Oct 15, 1992
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