IBM Reports 2006 Fourth-Quarter Results

IBM Reports 2006 Fourth-Quarter Results

IBM today announced fourth-quarter 2006 diluted earnings of $2.26 per share from continuing operations, an increase of 12 percent as reported, compared with diluted earnings of $2.01 per share in the fourth quarter of 2005; the fourth-quarter 2005 diluted earnings include $0.10 per share for a one-time pretax curtailment charge of $267 million related to pension changes. Diluted earnings per share for the fourth-quarter 2006 grew 7 percent compared with the year-ago quarter of $2.11 per diluted share, without the one-time per share charge. Fourth-quarter 2006 diluted earnings per share include a $0.06 benefit as a result of a lower tax rate.

Fourth-quarter income from continuing operations was $3.5 billion compared with $3.2 billion in the fourth quarter of 2005, an increase of 8 percent. Income from continuing operations for the fourth quarter grew 2 percent compared with the fourth-quarter 2005 income from continuing operations of $3.4 billion, excluding the one-time charge. Total revenues for the fourth quarter of 2006 of $26.3 billion increased 7 percent (4 percent, adjusting for currency) from the fourth quarter of 2005.

Samuel J. Palmisano, IBM chairman, president and chief executive officer, said: “IBM had a terrific quarter and a good year with record cash performance, profit and EPS, as well as record payouts to shareholders. We are well-positioned in the growth areas of a changing IT industry, focused on our evolving business model, and poised for long-term success for our clients and shareholders.”

From a geographic perspective, the Americas fourth-quarter revenues were $11.1 billion, an increase of 6 percent as reported (5 percent, adjusting for currency) from the 2005 period. Revenues from Europe/Middle East/Africa were $9.3 billion, up 11 percent (3 percent, adjusting for currency). Asia-Pacific revenues increased 7 percent (5 percent, adjusting for currency) to $4.8 billion. OEM revenues were $1.0 billion, down 3 percent compared with the 2005 fourth quarter.

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