​IBM Australia reports 2014 profit drop

IBM Australia saw a drop in both profit and revenue for the year ending 2014, with the company reporting a 37.5 percent fall in after-tax profit compared to the previous year.
Written by Leon Spencer, Contributor

IBM Australia has reported a 37.5 percent drop in net profit after tax to AU$145.9 million for the year ending 2014, compared to the previous year's result of AU$233.2 million.

According to the latest financial filing with the Australian Securities and Investments Commission (ASIC), the company's local arm also saw a dip in total revenue to AU$3.53 billion, down from the previous year's AU$4.12 billion.

The company's income tax expense for the year came to just under AU$8 million, representing around 5.2 percent of its pre-tax profit for the year.

IBM Australia's results come as some of the biggest tech companies in Australia, including Apple, Microsoft, and Google, find themselves under investigation by the Australian Taxation Office (ATO) for their respective taxation treatments, which have seen them -- along with other large companies -- pay less than Australia's going corporate tax rate of 30 percent.

However, in IBM Australia's case, the company's financial statement reveals that its total tax expense for the year was AU$45.17 million, around 30 percent of its pre-tax profit, but AU$36.51 million of that was deferred due to the "origination and reversal of temporary differences".

IBM Australia also got a AU$2.67 million tax break under the government's concessional research and development benefit scheme.

The company reported AU$50.95 million in gains on divestiture of businesses. During the year, its x86 server business was acquired by Lenovo Group at AU$14,446,000, generating a gain of $18,500,000.

Additionally, the group's worldwide customer care services business was acquired by Synnex at AU$40,845,000, generating a gain of AU$31,729,000.

Globally, IBM's first-quarter earnings, released earlier this month, were better than expected and sales were roughly in line, with the company reporting first-quarter non-GAAP earnings of $2.9 billion, or $2.91 a share, on revenue of $19.6 billion.

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