IBM's fourth quarter was better than expected on both the bottom and top lines.
IBM reported fourth quarter earnings of $5.8 billion, or $5.13 a share, on revenue of $29.3 billion, down 1 percent from a year ago. Non-GAAP earnings were $5.39 a share.
Wall Street was expecting IBM to report fourth quarter earnings of $5.25 a share on revenue of $29.08 billion. For 2012, IBM reported earnings of $16.6 billion, or $14.37 a share, on revenue of $104.5 billion, down 2 percent from a year ago.
Overall, IBM weathered sluggish IT spending well. Software revenue was up 3 percent; services sales fell 2 percent and systems and technology sales fell 1 percent. System z mainframe sales were up 56 percent from a year ago.
On a conference call, IBM CFO Mark Loughridge said:
Our new hardware product introductions really performed in the quarter. We had excellent acceptance of our new mainframe and our System Z revenue was up 56% year to year, so it's been a very successful launch. Not only in major markets, but in growth markets where we were up 65%. And we had significant growth in our mainframe specialty engines led by Linux. This is a good indicator, not only of new work loads moving onto the platform, but also the value of a vertically integrated system.
For 2013, IBM projected GAAP earnings of $15.53 a share and non-GAAP earnings of at least $16.70 a share. Wall Street was looking for earnings of $16.63 a share.
By the numbers:
Fourth quarter sales from Europe, Middle East and Africa fell 5 percent from a year ago to $9.1 billion. Asia-Pacific revenue in the fourth quarter was $7 billion, down 4 percent. Revenue in the fourth quarter from Brazil, Russia, India and China was up 11 percent.
Global technology services revenue fell 2 percent in the fourth quarter and global business services sales were down 3 percent. Backlog was flat.
Software sales in the fourth quarter was $7.9 billion, up 3 percent from a year ago. Pre-tax earnings in the quarter was up 8 percent from a year ago.
Hardware revenue was $5.8 billion in the fourth quarter, down 1 percent from a year ago. Cloud revenue for 2012 was up 80 percent.