IBM announcedfirst-quarter 2007 diluted earnings of $1.21 per share from continuingoperations, an increase of 12 percent as reported, compared with dilutedearnings of $1.08 per share inthe first quarter of 2006. First-quarter income from continuing operations was$1.8 billion compared with $1.7 billion in the first quarter of 2006, anincrease of 8 percent. Total revenues for the first quarter of 2007 of $22.0billion increased 7 percent (4 percent, adjusting for currency) from the firstquarter of 2006.
From a geographic perspective, the Americasfirst-quarter revenues were $9.1 billion, an increase of 1 percent as reported(1 percent, adjusting for currency) from the 2006 period. Revenues fromEurope/Middle East/Africa were $7.6 billion, up 13 percent (5 percent,adjusting for currency). Asia-Pacific revenues increased 10 percent (9 percent,adjusting for currency) to $4.5 billion. OEM revenues were $828 million, down 5percent compared with the 2006 first quarter.
Total Global Services revenues grew 8 percent (4 percent,adjusting for currency). Segment revenues from Global Business Servicesincreased 9 percent (6 percent, adjusting for currency) to $4.2 billion, andsegment revenues from Global Technology Services increased 7 percent (4percent, adjusting for currency) to $8.3 billion. IBM signed services contractstotaling $11.1 billion, down 2 percent year over year, and ended the firstquarter with an estimated services backlog, including Strategic Outsourcing,Business Transformation Outsourcing, Global Business Services, IntegratedTechnology Services and Maintenance, of $115 billion.
Revenues from the Systems and Technology (S&T) segmenttotaled $4.5 billion for the quarter, up 2 percent (flat, adjusting forcurrency). S&T revenues from System z server products increased 12 percentcompared with the year-ago period. Total delivery of System z computing power,which is measured in MIPS (millions of instructions per second), increased 9percent. Revenues from the System p UNIX server products increased 14 percentcompared with the 2006 period. Revenues from the System x servers increased 7percent, and revenues from the System i servers decreased 13 percent. Revenuesfrom Microelectronics decreased 7 percent and revenues from System Storagedecreased 1 percent.
Revenues from the Software segment were $4.3 billion, anincrease of 9 percent (5 percent, adjusting for currency) compared with thefirst quarter of 2006. Revenues from IBM's middleware products, which primarilyinclude WebSphere, Information Management, Tivoli, Lotus and Rational products, were$3.2 billion, up 10 percent versus the first quarter of 2006. Operating systemsrevenues of $522 million were flat compared with the prior-year quarter.Revenues from other software and services increased, which includes the ProductLifecycle Management portfolio of products.
For the WebSphere family of software products, whichfacilitate customers' ability to manage a wide variety of business processesusing open standards to interconnect applications, data and operating systems,revenues increased 14 percent. Revenues for Information Management software,which enables clients to leverage information on demand, increased 20 percent.Revenues from Tivolisoftware, infrastructure software that enables customers to centrally managenetworks including security and storage capability, increased 18 percent, andrevenues for Lotus software, which allows collaborating and messaging bycustomers in real-time communication and knowledge management, increased 7 percentyear over year. Revenues from Rational software, integrated tools to improvethe processes of software development, increased 15 percent compared with theyear-ago quarter.
The company's total gross profit margin was 40.2 percent inthe 2007 first quarter compared with 39.1 percent in the 2006 period -- the11th consecutive quarter of year-to-year increase.
Total expense and other income increased 11 percent to $6.3billion compared with the prior-year period. SG&A expense increased 11percent to $5.1 billion. RD&E expense increased 4 percent compared with theyear-ago period. Intellectual property and custom development income decreasedto $205 million compared with $229 million a year ago. Other (income) andexpense contributed income of $180 million in the first quarter of 2007 versusincome of $246 million in the first quarter of 2006.
Shares repurchased totaled approximately $3.5 billion in thefirst quarter. The weighted-average number of diluted common shares outstandingin the first-quarter 2007 was 1.52 billion compared with 1.59 billion shares inthe same period of 2006. As of March 31, 2007, there were 1.48 billion basiccommon shares outstanding.
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