IBM announces 1991 financial results

IBM announces 1991 financial results

Armonk, N.Y. -- January 17, 1992 -- Business Wire -- IBM Friday reported preliminary worldwide financial results for 1991. IBM's revenue and earnings declined from those of the previous year for the fourth quarter and full year.

IBM Chairman John F. Akers said, "1991 was a disappointing year. We were adversely affected by protracted worldwide economic weakness, competitive pressures, and transitions within our product lines."

For the quarter ended December 31, 1991, worldwide revenue was $22.1 billion, a decline of 4.2 percent from the prior year's $23.1 billion. Worldwide net earnings after taxes for the three months, including $3.4 billion of charges for restructuring and related actions, were negative $1.4 billion in 1991 compared with $2.5 billion in 1990. Earnings-per-share including the restructuring charges were negative $2.42 in 1991 compared with $4.30 in 1990. Restructuring charges against fourth-quarter earnings amounted to approximately $4.68 per-share. Average shares outstanding for the period were 571.6 million in 1991 and 571.1 million in 1990.

Worldwide revenue for the year ended December 31, 1991, was $64.8 billion, a decline of 6.1 percent from the prior year's $69.0 billion. In 1991, worldwide earnings before income taxes, including charges for restructuring and related actions, were $121 million. Worldwide earnings after taxes, including restructuring charges and before a one-time charge due to the adoption of SFAS 106(a) in the first quarter of 1991, were negative $564 million compared with $6.0 billion in 1990. Net earnings after taxes after the adoption of SFAS 106(a) were negative $2.8 billion. Earnings-per-share including restructuring charges and before the one-time charge due to the adoption of SFAS 106(a) were negative $.99 in 1991 compared with $10.51 per share in 1990. After considering the $3.96 per-share adjustment caused by the one-time charge due to the adoption of SFAS 106(a) taken in the first quarter of 1991, earnings-per-share were negative $4.95. Average shares outstanding were 572.0 million in 1991 and 572.6 million in 1990.

Revenue from non-U.S. operations in 1991, included in consolidated results, was $40.4 billion, a decline of 3.6 percent from $41.9 billion in 1990. Non-U.S. net earnings after taxes were $1.8 billion in 1991 compared with $4.6 billion in 1990.

Mr. Akers said, "IBM took aggressive actions in 1991 to make IBM more competitive and efficient. We exceeded our worldwide workforce reduction goals for 1991, and reduced our workforce by about 29,000 IBMers. We will continue to reduce our workforce in 1992.

"We continued to strengthen our product line and broadened our business alliances. Our services business grew by 35 percent, faster than the industry. That portion of our revenue that is less subject to year-to-year fluctuations -- services, software, rentals and financing -- is 43 percent of our 1991 revenue.

"Finally, at the end of 1991, we announced comprehensive management system changes that will transform IBM's units into increasingly independent and accountable businesses and companies. We are moving into 1992 a tougher, smarter, and more competitive business. Assuming some improvement in the current difficult and uncertain economic environment, we expect to increase revenue and improve cash flow and returns as the year goes on." (a) SFAS 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions." Comparative preliminary financial results: Twelve months ended December 31 (In millions except per-share amounts) % Increase 1991 1990 (Decrease) Revenue: Sales $ 37,093 $ 43,959 (15.6) Software 10,524 9,952 5.8 Maintenance 7,414 7,198 3.0 Services 5,582 4,124 35.3 Rentals and financing 4,179 3,785 10.4 64,792 69,018 (6.1) Costs and expenses 63,850 57,986 10.1 Operating income 942 11,032 (91.5) Other income 602 495 21.6 Interest expense 1,423 1,324 7.4 Earnings before income taxes 121 10,203 (98.8) Provision for income taxes 685 4,183 (83.6) Earnings before transition effect of change in accounting principle (564) 6,020 (109.4) Transition effect of change in accounting principle (SFAS 106(a)) (2,263) - Net earnings $ (2,827) $ 6,020 (147.0) Per-share amounts: Before transition effect of change in accounting principle $ (.99) $ 10.51 (109.4) Transition effect of change in accounting principle (SFAS 106(a)) (3.96) - Net earnings $ (4.95) $ 10.51 (147.1) Average number of shares outstanding 572.0 572.6 (a) SFAS 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions." International Business Machines Corporation January 17, 1992 Comparative preliminary financial results:

Three months ended December 31

(In millions except per-share amounts)

% Increase

1991 1990 (Decrease) Revenue: Sales

$ 13,718 $ 15,487 (11.4) Software 3,368

3,104 8.5 Maintenance 1,913 1,936

(1.2) Services 2,049 1,517 35.0 Rentals and financing 1,034 1,017 1.7

22,082 23,061 (4.2) Costs and expenses (a)23,093 18,805 22.8 Operating income (1,011) 4,256 (123.8) Other income 178 95 87.6 Interest expense 448 357 25.4 Earnings before income taxes (1,281) 3,994 (132.1) Provision for income taxes 101 1,533 (93.4) Net earnings $ (1,382) $ 2,461 (156.2) Per share $ (2.42) $ 4.30 (156.3) Average number of shares outstanding 571.6 571.1 (a) Results in 1991 include charges of $3,400M for restructuring and related actions. International Business Machines Corporation January 17, 1992

Revenue - Earnings

(In millions except per-share amounts)

1991(a) 1990 (% Decrease) Revenue

1st Quarter $ 13,545 $ 14,185 (4.5)

2nd Quarter 14,732 16,495 (10.7)

6 Months 28,277 30,680 (7.8)

3rd Quarter 14,433 15,277 (5.5)

9 Months 42,710 45,957 (7.1)

4th Quarter 22,082 23,061 (4.2)

Year 64,792 69,018 (6.1) Earnings Before Income Taxes

1st Quarter 887 1,827 (51.5)

2nd Quarter 207 2,473 (91.6)

6 Months 1,094 4,300 (74.6)

3rd Quarter 308 1,909 (83.9)

9 Months 1,402 6,209 (77.4)

4th Quarter (1,281) 3,994 (132.1)

Year 121 10,203 (98.8) Net Earnings

1st Quarter (1,731) 1,037 (266.9)

2nd Quarter 114 1,410 (91.9)

6 Months (1,617) 2,447 (166.1)

3rd Quarter 172 1,112 (84.5)

9 Months (1,445) 3,559 (140.6)

4th Quarter (1,382) 2,461 (156.2)

Year (2,827) 6,020 (147.0) Earnings-Per-Share

1st Quarter $ (3.03) $ 1.81 (267.4)

2nd Quarter .20 2.45 (91.8)

6 Months (2.83) 4.26 (166.4)

3rd Quarter .30 1.95 (84.6)

9 Months (2.53) 6.21 (140.7)

4th Quarter (2.42) 4.30 (156.3)

Year (4.95) 10.51 (147.1) (a) 1991 first quarter and year-to-date results reflect the effect of the adoption of SFAS 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions."

CONTACT: International Business Machines Corp., Armonk Rob Wilson, 914/765-6565 08:32 ET