Another banner quarter for IBM, another disappointing quarter for Lotus
IBM's quarterly earnings were announced today, and they announced record numbers which doesn't surprise me:
* Diluted earnings per share of $4.18, up 16 percent;
* Record revenue of $29.0 billion, up 7 percent as reported and adjusting for currency;
* Record net income of $5.3 billion, up 9 percent;
* Pre-tax income of $7 billion, up 9 percent;
* Gross profit margin of 49 percent, up 0.8 points;
* Software revenue excluding divested PLM operations up 11 percent, 12 percent adjusting for currency; 7 percent including PLM;
* Systems and Technology revenue up 21 percent, 22 percent adjusting for currency;
* System z mainframe revenue up 69 percent; MIPS up 58 percent;
* Services revenue up 2 percent as reported and adjusting for currency;
* Services backlog of $142 billion, up $5 billion year over year and up $8 billion quarter to quarter;
* Growth markets revenue up 15 percent, 13 percent adjusting for currency;
* Business analytics revenue up 19 percent;
* Free cash flow of $8.7 billion, up $1.5 billion.
* Diluted earnings per share of $11.52, up 15 percent and $0.52 ahead of high end of 2010 roadmap; 8th consecutive year of double-digit EPS growth;
* Revenue of $99.9 billion, up 4 percent, up 3 percent adjusting for currency; up 5 percent, 4 percent adjusting for currency, excluding PLM operations;
* Record net income of $14.8 billion, up 10 percent;
* Record free cash flow of $16.3 billion, up $1.2 billion;
* Gross profit margin of 46.1 percent, 7th consecutive year of increase.
Rah, rah... go team go...
"We completed an outstanding year, with record profit and free cash flow, and exceeded the high end of our 2010 earnings per share roadmap objective," said Samuel J. Palmisano, IBM chairman, president and chief executive officer. "We also capped a decade in which our shift to high-value businesses, our global integration of IBM, our investment in research and development of almost $60 billion and our acquisition of 116 companies have helped us to nearly triple our EPS and return more than $100 billion to shareholders.
“As IBM enters its second century, we will continue to focus on our long-term strategic initiatives -- growth markets, Smarter Planet Solutions, cloud and business analytics -- as we drive to achieve our new roadmap target of operating earnings per share of at least $20 in 2015."
And as we Notes/Domino people are want to do, we head further down into the numbers to see how Lotus did...
Revenues from IBM’s key middleware products, which include WebSphere, Information Management, Tivoli, Lotus and Rational products, were $4.7 billion, an increase of 13 percent (15 percent, adjusting for currency) versus the fourth quarter of 2009. Operating systems revenues of $690 million increased 11 percent (12 percent, adjusting for currency) compared with the prior-year quarter.
Whoo-hoo! Double-digit growth for the group that includes Lotus! That's great news, right?
Revenues from the WebSphere family of software products increased 32 percent year over year. Information Management software revenues increased 10 percent. Revenues from Tivoli software increased 12 percent. Revenues from Lotus software decreased 3 percent, and Rational software increased 10 percent.
Not so much, I see...
I'm looking forward to seeing how this spins in two weeks. We have big competitive wins that don't want to be referral cases? Lotus Connections is going gangbusters? LotusLive is climbing at an exponential rate? All the people we hear in our community who are claiming that Notes/Domino for email and apps is getting killed by SharePoint and Exchange don't really have the whole picture?
Yes, I'm extremely cynical right now about the message coming out of IBM about Lotus. The numbers continue to slide, yet we're supposed to be excited about where Lotus is headed. I'm sure where it's headed will be cool... I just don't know that there will be anyone left to appreciate it.