Technology
IBM RELEASES SECOND-QUARTER RESULTS
Published
2 months agoon
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Accelerated revenue growth led by Software; Raises full-year free cash flow expectation
ARMONK, N.Y., July 24, 2024 /PRNewswire/ — IBM (NYSE: IBM) today announced second-quarter 2024 earnings results.
“We had a strong second quarter, exceeding our expectations, driven by growth in both revenue and free cash flow. We continue to see that clients turn to IBM for our technology and our expertise in enterprise AI, and our book of business for generative AI has grown to more than two billion dollars since the launch of watsonx one year ago,” said Arvind Krishna, IBM chairman and chief executive officer. “Given our first-half results, we are raising our full-year view of free cash flow, which we now expect to be more than $12 billion.”
Second-Quarter Highlights
Revenue
– Revenue of $15.8 billion, up 2 percent, up 4 percent at constant currency
– Software revenue up 7 percent, up 8 percent at constant currency
– Consulting revenue down 1 percent, up 2 percent at constant currency
– Infrastructure revenue up 1 percent, up 3 percent at constant currency
Profit Margin
– Gross Profit Margin: GAAP: 56.8 percent, up 180 basis points; Operating (Non-GAAP): 57.8 percent, up 190 basis points
– Pre-Tax Income Margin: GAAP: 14.1 percent, up 110 basis points; Operating (Non-GAAP): 17.7 percent, up 220 basis points
Cash Flow
– Year to date, net cash from operating activities of $6.2 billion, down $0.2 billion; free cash flow of $4.5 billion, up $1.1 billion
– Over the last twelve months, net cash from operating activities of $13.8 billion; free cash flow of $12.3 billion
SECOND QUARTER 2024 INCOME STATEMENT SUMMARY
Revenue
Gross
Profit
Gross
Profit
Margin
Pre-tax
Income
Pre-tax
Income
Margin
Net
Income
Diluted
Earnings
Per Share
GAAP from
Continuing
Operations
$ 15.8 B
$ 8.9 B
56.8
%
$ 2.2 B
14.1
%
$ 1.8 B
$ 1.96
Year/Year
2
%(1)
5
%
1.8
Pts
11
%
1.1
Pts
16
%
14
%
Operating
(Non-GAAP)
$ 9.1 B
57.8
%
$ 2.8 B
17.7
%
$ 2.3 B
$ 2.43
Year/Year
5
%
1.9
Pts
17
%
2.2
Pts
14
%
11
%
(1) 4% at constant currency.
“In the quarter, we accelerated our revenue growth as we continue to execute well on our strategy. Our business fundamentals, operating leverage, product mix and productivity initiatives all contributed to significant margin expansion and increased profit and free cash flow,” said James Kavanaugh, IBM senior vice president and chief financial officer. “Our strong cash generation enables us to continue investing in innovation and expertise across the portfolio, while returning value to shareholders through dividends.”
Segment Results for Second Quarter
Software — revenues of $6.7 billion, up 7.1 percent, up 8.4 percent at constant currency:
– Hybrid Platform & Solutions up 5 percent, up 6 percent at constant currency:
— Red Hat up 7 percent, up 8 percent at constant currency
— Automation up 15 percent, up 16 percent at constant currency
— Data & AI down 3 percent, down 2 percent at constant currency
— Security up 2 percent, up 3 percent at constant currency
– Transaction Processing up 11 percent, up 13 percent at constant currency
Consulting — revenues of $5.2 billion, down 0.9 percent, up 1.8 percent at constant currency:
– Business Transformation up 3 percent, up 6 percent at constant currency
– Technology Consulting down 3 percent, up 1 percent at constant currency
– Application Operations down 4 percent, down 2 percent at constant currency
Infrastructure — revenues of $3.6 billion, up 0.7 percent, up 2.7 percent at constant currency:
– Hybrid Infrastructure up 4 percent, up 6 percent at constant currency
— IBM Z up 6 percent, up 8 percent at constant currency
— Distributed Infrastructure up 3 percent, up 5 percent at constant currency
– Infrastructure Support down 5 percent, down 3 percent at constant currency
Financing — revenues of $0.2 billion, down 8.3 percent, down 6.6 percent at constant currency
Cash Flow and Balance Sheet
In the second quarter, the company generated net cash from operating activities of $2.1 billion, down $0.6 billion year to year. IBM’s free cash flow was $2.6 billion, up $0.5 billion year to year. The company returned $1.5 billion to shareholders in dividends in the second quarter.
For the first six months of the year, the company generated net cash from operating activities of $6.2 billion, down $0.2 billion year to year. IBM’s free cash flow was $4.5 billion, up $1.1 billion year to year. Over the last twelve months, the company generated net cash from operating activities of $13.8 billion and free cash flow of $12.3 billion.
IBM ended the second quarter with $16.0 billion of cash, restricted cash and marketable securities, up $2.5 billion from year-end 2023. Debt, including IBM Financing debt of $11.1 billion, totaled $56.5 billion, flat year to date.
Full-Year 2024 Expectations
Revenue: The company continues to expect constant currency revenue growth consistent with its mid-single digit model. At current foreign exchange rates, currency is expected to be about a one to two-point headwind to revenue growth
Free cash flow: The company now expects more than $12 billion in free cash flow
Forward-Looking and Cautionary Statements
Except for the historical information and discussions contained herein, statements contained in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on the company’s current assumptions regarding future business and financial performance. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, including, but not limited to, the following: a downturn in economic environment and client spending budgets; a failure of the company’s innovation initiatives; damage to the company’s reputation; risks from investing in growth opportunities; failure of the company’s intellectual property portfolio to prevent competitive offerings and the failure of the company to obtain necessary licenses; the company’s ability to successfully manage acquisitions, alliances and dispositions, including integration challenges, failure to achieve objectives, the assumption of liabilities and higher debt levels; fluctuations in financial results; impact of local legal, economic, political, health and other conditions; the company’s failure to meet growth and productivity objectives; ineffective internal controls; the company’s use of accounting estimates; impairment of the company’s goodwill or amortizable intangible assets; the company’s ability to attract and retain key employees and its reliance on critical skills; impacts of relationships with critical suppliers; product quality issues; impacts of business with government clients; reliance on third party distribution channels and ecosystems; cybersecurity and data privacy considerations; adverse effects related to climate change and environmental matters; tax matters; legal proceedings and investigatory risks; the company’s pension plans; currency fluctuations and customer financing risks; impact of changes in market liquidity conditions and customer credit risk on receivables; potential failure of the separation of Kyndryl Holdings, Inc. to qualify for tax-free treatment; risk factors related to IBM securities; and other risks, uncertainties and factors discussed in the company’s Form 10-Qs, Form 10-K and in the company’s other filings with the U.S. Securities and Exchange Commission or in materials incorporated therein by reference.
Statements in this communication regarding the strategic acquisition that are forward-looking may include projections as to closing date for the transaction, the extent of, and the time necessary to obtain, the regulatory approvals required for the transaction, the anticipated benefits of the transaction, the impact of the transaction on IBM’s business, the synergies from the transaction, and the combined company’s future operating results.
Any forward-looking statement in this release speaks only as of the date on which it is made. Except as required by law, the company assumes no obligation to update or revise any forward-looking statements.
Presentation of Information in this Press Release
In an effort to provide investors with additional information regarding the company’s results as determined by generally accepted accounting principles (GAAP), the company has also disclosed in this press release the following non-GAAP information, which management believes provides useful information to investors:
IBM results —
adjusting for currency (i.e., at constant currency);
presenting operating (non-GAAP) earnings per share amounts and related income statement items;
free cash flow;
net cash from operating activities excluding IBM Financing receivables;
adjusted EBITDA.
The rationale for management’s use of these non-GAAP measures is included in Exhibit 99.2 in the Form 8-K that includes this press release and is being submitted today to the SEC.
For generative AI, book of business includes Software transactional revenue, SaaS Annual Contract Value and Consulting signings.
Conference Call and Webcast
IBM’s regular quarterly earnings conference call is scheduled to begin at 5:00 p.m. ET, today. The Webcast may be accessed via a link at https://www.ibm.com/investor/events/earnings-2q24. Presentation charts will be available shortly before the Webcast.
Financial Results Below (certain amounts may not add due to use of rounded numbers; percentages presented are calculated from the underlying whole-dollar amounts).
Contact: IBM
Sarah Meron, 347-891-1770
sarah.meron@ibm.com
Tim Davidson, 914-844-7847
tfdavids@us.ibm.com
INTERNATIONAL BUSINESS MACHINES CORPORATION
COMPARATIVE FINANCIAL RESULTS
(Unaudited; Dollars in millions except per share amounts)
Three Months Ended
June 30,
Six Months Ended
June 30,
2024
2023 (1)
2024
2023 (1)
REVENUE BY SEGMENT
Software
$ 6,739
$ 6,294
$ 12,637
$ 11,885
Consulting
5,179
5,226
10,365
10,423
Infrastructure
3,645
3,618
6,721
6,716
Financing
169
185
362
380
Other
38
152
146
321
TOTAL REVENUE
15,770
15,475
30,231
29,727
GROSS PROFIT
8,950
8,501
16,692
16,010
GROSS PROFIT MARGIN
Software
83.6
%
82.1
%
83.0
%
82.3
%
Consulting
26.3
%
25.9
%
25.8
%
25.7
%
Infrastructure
56.5
%
56.0
%
55.4
%
54.1
%
Financing
48.9
%
49.2
%
48.7
%
46.5
%
TOTAL GROSS PROFIT MARGIN
56.8
%
54.9
%
55.2
%
53.9
%
EXPENSE AND OTHER INCOME
S,G&A
4,938
4,900
9,912
9,754
R,D&E
1,840
1,687
3,637
3,342
Intellectual property and custom development income
(241)
(248)
(458)
(428)
Other (income) and expense
(233)
(261)
(550)
(506)
Interest expense
427
423
859
790
TOTAL EXPENSE AND OTHER INCOME
6,730
6,501
13,399
12,952
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES
2,219
2,000
3,293
3,058
Pre-tax margin
14.1
%
12.9
%
10.9
%
10.3
%
Provision for/(Benefit from) income taxes
389
419
(112)
543
Effective tax rate
17.5
%
21.0
%
(3.4)
%
17.8
%
INCOME FROM CONTINUING OPERATIONS
$ 1,830
$ 1,581
$ 3,405
$ 2,515
DISCONTINUED OPERATIONS
Income/(loss) from discontinued operations, net of taxes
4
2
34
(4)
NET INCOME
$ 1,834
$ 1,583
$ 3,439
$ 2,511
EARNINGS/(LOSS) PER SHARE OF COMMON STOCK
Assuming Dilution
Continuing Operations
$ 1.96
$ 1.72
$ 3.65
$ 2.74
Discontinued Operations
$ 0.00
$ 0.00
$ 0.04
$ 0.00
TOTAL
$ 1.96
$ 1.72
$ 3.68
$ 2.73
Basic
Continuing Operations
$ 1.99
$ 1.74
$ 3.71
$ 2.77
Discontinued Operations
$ 0.00
$ 0.00
$ 0.04
$ 0.00
TOTAL
$ 1.99
$ 1.74
$ 3.74
$ 2.76
WEIGHTED-AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING (M’s)
Assuming Dilution
934.4
919.5
933.9
918.6
Basic
920.3
909.9
918.7
908.7
____________________
(1) Recast to reflect January 2024 segment changes.
INTERNATIONAL BUSINESS MACHINES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
(Dollars in Millions)
At
June 30,
2024
At
December 31,
2023
ASSETS:
Current Assets:
Cash and cash equivalents
$ 12,210
$ 13,068
Restricted cash
2,268
21
Marketable securities
1,481
373
Notes and accounts receivable – trade, net
5,769
7,214
Short-term financing receivables, net
5,799
6,793
Other accounts receivable, net
757
640
Inventories
1,234
1,161
Deferred costs
997
998
Prepaid expenses and other current assets
2,784
2,639
Total Current Assets
33,299
32,908
Property, plant and equipment, net
5,600
5,501
Operating right-of-use assets, net
3,130
3,220
Long-term financing receivables, net
5,483
5,766
Prepaid pension assets
7,630
7,506
Deferred costs
820
842
Deferred taxes
6,378
6,656
Goodwill
59,416
60,178
Intangibles, net
10,251
11,036
Investments and sundry assets
1,840
1,626
Total Assets
$ 133,848
$ 135,241
LIABILITIES:
Current Liabilities:
Taxes
$ 1,691
$ 2,270
Short-term debt
3,602
6,426
Accounts payable
3,631
4,132
Deferred income
13,643
13,451
Operating lease liabilities
762
820
Other liabilities
6,319
7,022
Total Current Liabilities
29,648
34,122
Long-term debt
52,929
50,121
Retirement related obligations
10,200
10,808
Deferred income
3,489
3,533
Operating lease liabilities
2,546
2,568
Other liabilities
10,932
11,475
Total Liabilities
109,745
112,628
EQUITY:
IBM Stockholders’ Equity:
Common stock
60,501
59,643
Retained earnings
151,659
151,276
Treasury stock — at cost
(169,815)
(169,624)
Accumulated other comprehensive income/(loss)
(18,319)
(18,761)
Total IBM Stockholders’ Equity
24,026
22,533
Noncontrolling interests
77
80
Total Equity
24,103
22,613
Total Liabilities and Equity
$ 133,848
$ 135,241
INTERNATIONAL BUSINESS MACHINES CORPORATION
CASH FLOW ANALYSIS
(Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
Trailing Twelve
Months Ended
June 30,
(Dollars in Millions)
2024
2023
2024
2023
2024
Net Cash from Operations per GAAP
$ 2,066
$ 2,638
$ 6,234
$ 6,412
$ 13,752
Less: change in IBM Financing receivables
(946)
50
951
2,028
156
Capital Expenditures, net
(399)
(487)
(761)
(944)
(1,305)
Free Cash Flow
2,612
2,101
4,522
3,441
12,292
Acquisitions
(153)
(334)
(235)
(356)
(4,961)
Divestitures
—
6
703
6
693
Dividends
(1,537)
(1,510)
(3,058)
(3,007)
(6,092)
Non-Financing Debt
(4,168)
(1,178)
1,076
8,514
(1,892)
Other (includes IBM Financing net receivables and debt)
(73)
(347)
(510)
(1,109)
(410)
Change in Cash, Cash Equivalents, Restricted Cash
and Short-term Marketable Securities
$ (3,318)
$ (1,263)
$ 2,497
$ 7,489
$ (370)
INTERNATIONAL BUSINESS MACHINES CORPORATION
CASH FLOW
(Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
(Dollars in Millions)
2024
2023
2024
2023
Net Income from Operations
$ 1,834
$ 1,583
$ 3,439
$ 2,511
Depreciation/Amortization of Intangibles (1)
1,155
1,076
2,287
2,150
Stock-based Compensation
316
288
636
556
Operating assets and liabilities/Other, net (2)
(293)
(359)
(1,079)
(832)
IBM Financing A/R
(946)
50
951
2,028
Net Cash Provided by Operating Activities
$ 2,066
$ 2,638
$ 6,234
$ 6,412
Capital Expenditures, net of payments & proceeds
(399)
(487)
(761)
(944)
Divestitures, net of cash transferred
–
6
703
6
Acquisitions, net of cash acquired
(153)
(334)
(235)
(356)
Marketable Securities / Other Investments, net
2,791
822
(1,679)
(6,659)
Net Cash Provided by/(Used in) Investing Activities
$ 2,239
$ 7
$ (1,971)
$ (7,953)
Debt, net of payments & proceeds
(2,900)
(1,135)
481
6,169
Dividends
(1,537)
(1,510)
(3,058)
(3,007)
Financing – Other
(78)
(86)
(61)
(185)
Net Cash Provided by/(Used in) Financing Activities
$ (4,515)
$ (2,731)
$ (2,638)
$ 2,978
Effect of Exchange Rate changes on Cash
(76)
(25)
(236)
(1)
Net Change in Cash, Cash Equivalents and Restricted Cash
$ (287)
$ (110)
$ 1,389
$ 1,436
____________________
(1) Includes operating lease right-of-use assets amortization.
(2) Includes the reduction of tax reserves.
INTERNATIONAL BUSINESS MACHINES CORPORATION
GAAP NET INCOME TO ADJUSTED EBITDA RECONCILIATION
(Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
(Dollars in Billions)
2024
2023
Yr/Yr
2024
2023
Yr/Yr
Net Income as reported (GAAP)
$ 1.8
$ 1.6
$ 0.3
$ 3.4
$ 2.5
$ 0.9
Less: Income/(loss) from discontinued operations, net of tax
0.0
0.0
0.0
0.0
0.0
0.0
Income from continuing operations
1.8
1.6
0.2
3.4
2.5
0.9
Provision for/(Benefit from) income taxes from continuing ops.
0.4
0.4
0.0
(0.1)
0.5
(0.7)
Pre-tax income from continuing operations (GAAP)
2.2
2.0
0.2
3.3
3.1
0.2
Non-operating adjustments (before tax)
Acquisition-related charges (1)
0.5
0.4
0.1
1.0
0.8
0.2
Non-operating retirement-related costs/(income)
0.1
0.0
0.1
0.2
0.0
0.2
Operating (non-GAAP) pre-tax income from continuing ops.
2.8
2.4
0.4
4.4
3.8
0.6
Net interest expense
0.2
0.2
0.0
0.4
0.4
0.0
Depreciation/Amortization of non-acquired intangible assets
0.7
0.7
0.0
1.4
1.4
0.0
Stock-based compensation
0.3
0.3
0.0
0.6
0.6
0.1
Workforce rebalancing charges
0.0
0.1
(0.1)
0.4
0.4
0.0
Corporate (gains) and charges (2)
0.0
0.0
0.0
(0.2)
0.0
(0.2)
Adjusted EBITDA
$ 4.0
$ 3.7
$ 0.4
$ 7.1
$ 6.5
$ 0.5
____________________
(1) Primarily consists of amortization of acquired intangible assets.
(2) Corporate (gains) and charges primarily consists of unique corporate actions such as gains on divestitures.
INTERNATIONAL BUSINESS MACHINES CORPORATION
SEGMENT DATA
(Unaudited)
Three Months Ended June 30, 2024
(Dollars in Millions)
Software
Consulting
Infrastructure
Financing
Revenue
$ 6,739
$ 5,179
$ 3,645
$ 169
Segment Profit
$ 2,113
$ 463
$ 654
$ 77
Segment Profit Margin
31.3
%
8.9
%
17.9
%
45.3
%
Change YTY Revenue
7.1
%
(0.9)
%
0.7
%
(8.3)
%
Change YTY Revenue – Constant Currency
8.4
%
1.8
%
2.7
%
(6.6)
%
Three Months Ended June 30, 2023 (1)
(Dollars in Millions)
Software
Consulting
Infrastructure
Financing
Revenue
$ 6,294
$ 5,226
$ 3,618
$ 185
Segment Profit
$ 1,749
$ 483
$ 732
$ 64
Segment Profit Margin
27.8
%
9.2
%
20.2
%
34.8
%
____________________
(1) Recast to reflect January 2024 segment changes.
Six Months Ended June 30, 2024
(Dollars in Millions)
Software
Consulting
Infrastructure
Financing
Revenue
$ 12,637
$ 10,365
$ 6,721
$ 362
Segment Profit
$ 3,612
$ 888
$ 965
$ 168
Segment Profit Margin
28.6
%
8.6
%
14.4
%
46.5
%
Change YTY Revenue
6.3
%
(0.6)
%
0.1
%
(4.9)
%
Change YTY Revenue – Constant Currency
7.2
%
1.8
%
1.5
%
(4.0)
%
Six Months Ended June 30, 2023 (1)
(Dollars in Millions)
Software
Consulting
Infrastructure
Financing
Revenue
$ 11,885
$ 10,423
$ 6,716
$ 380
Segment Profit
$ 3,128
$ 910
$ 1,039
$ 164
Segment Profit Margin
26.3
%
8.7
%
15.5
%
43.2
%
__________
(1) Recast to reflect January 2004 segment changes.
INTERNATIONAL BUSINESS MACHINES CORPORATION
U.S. GAAP TO OPERATING (Non-GAAP) RESULTS RECONCILIATION
(Unaudited; Dollars in millions except per share amounts)
Three Months Ended June 30, 2024
Continuing Operations
GAAP
Acquisition-
Related
Adjustments (1)
Retirement-
Related
Adjustments (2)
Tax
Reform
Impacts
Operating
(Non-GAAP)
Gross Profit
$ 8,950
$ 170
$ —
$ —
$ 9,120
Gross Profit Margin
56.8
%
1.1
pts
—
pts
—
pts
57.8
%
S,G&A
$ 4,938
$ (286)
$ —
$ —
$ 4,651
Other (Income) & Expense
(233)
(18)
(98)
—
(349)
Total Expense & Other (Income)
6,730
(304)
(98)
—
6,328
Pre-tax Income from Continuing Operations
2,219
474
98
—
2,792
Pre-tax Income Margin from Continuing
Operations
14.1
%
3.0
pts
0.6
pts
—
pts
17.7
%
Provision for/(Benefit from) Income Taxes (3)
$ 389
$ 113
$ 26
$ (12)
$ 516
Effective Tax Rate
17.5
%
1.1
pts
0.3
pts
(0.4)
pts
18.5
%
Income from Continuing Operations
$ 1,830
$ 362
$ 72
$ 12
$ 2,275
Income Margin from Continuing Operations
11.6
%
2.3
pts
0.5
pts
0.1
pts
14.4
%
Diluted Earnings Per Share: Continuing
Operations
$ 1.96
$ 0.39
$ 0.08
$ 0.01
$ 2.43
Three Months Ended June 30, 2023
Continuing Operations
GAAP
Acquisition-
Related
Adjustments (1)
Retirement-
Related
Adjustments (2)
Tax
Reform
Impacts
Operating
(Non-GAAP)
Gross Profit
$ 8,501
$ 150
$ —
$ —
$ 8,650
Gross Profit Margin
54.9
%
1.0
pts
—
pts
—
pts
55.9
%
S,G&A
$ 4,900
$ (245)
$ —
$ —
$ 4,655
Other (Income) & Expense
(261)
0
(1)
—
(262)
Total Expense & Other (Income)
6,501
(246)
(1)
—
6,254
Pre-tax Income from Continuing Operations
2,000
395
1
—
2,396
Pre-tax Income Margin from Continuing
Operations
12.9
%
2.6
pts
0.0
pts
—
pts
15.5
%
Provision for/(Benefit from) Income Taxes (3)
$ 419
$ 87
$ (3)
$ (110)
$ 393
Effective Tax Rate
21.0
%
0.2
pts
(0.2)
pts
(4.6)
pts
16.4
%
Income from Continuing Operations
$ 1,581
$ 308
$ 5
$ 110
$ 2,003
Income Margin from Continuing Operations
10.2
%
2.0
pts
0.0
pts
0.7
pts
12.9
%
Diluted Earnings Per Share: Continuing
Operations
$ 1.72
$ 0.34
$ 0.00
$ 0.12
$ 2.18
____________________
(1) Includes amortization of purchased intangible assets, in process R&D, transaction costs, applicable restructuring and related expenses, tax
charges related to acquisition integration and pre-closing charges, such as financing costs. 2024 also includes a loss of $18 million on foreign
exchange derivative contracts entered into by the company prior to the acquisition of StreamSets and webMethods from Software AG.
(2) Includes amortization of prior service costs, interest cost, expected return on plan assets, amortized actuarial gains/losses, the impacts of any plan
curtailments/settlements and pension insolvency costs and other costs.
(3) Tax impact on operating (non-GAAP) pre-tax income from continuing operations is calculated under the same accounting principles applied to the
As Reported pre-tax income under ASC 740, which employs an annual effective tax rate method to the results.
INTERNATIONAL BUSINESS MACHINES CORPORATION
U.S. GAAP TO OPERATING (Non-GAAP) RESULTS RECONCILIATION
(Unaudited; Dollars in millions except per share amounts)
Six Months Ended June 30, 2024
Continuing Operations
GAAP
Acquisition-
Related
Adjustments (1)
Retirement-
Related
Adjustments (2)
Tax
Reform
Impacts (3)
Operating
(Non-GAAP)
Gross Profit
$ 16,692
$ 341
$ —
$ —
$ 17,033
Gross Profit Margin
55.2
%
1.1
pts
—
pts
—
pts
56.3
%
S,G&A
$ 9,912
$ (554)
$ —
$ —
$ 9,358
Other (Income) & Expense
(550)
(68)
(194)
—
(812)
Total Expense & Other (Income)
13,399
(622)
(194)
—
12,584
Pre-tax Income from Continuing Operations
3,293
963
194
—
4,449
Pre-tax Income Margin from Continuing
Operations
10.9
%
3.2
pts
0.6
pts
—
pts
14.7
%
Provision for/(Benefit from) Income Taxes (4)
$ (112)
$ 255
$ 31
$ 436
$ 610
Effective Tax Rate
(3.4)
%
6.5
pts
0.9
pts
9.8
pts
13.7
%
Income from Continuing Operations
$ 3,405
$ 707
$ 163
$ (436)
$ 3,839
Income Margin from Continuing Operations
11.3
%
2.3
pts
0.5
pts
(1.4)
pts
12.7
%
Diluted Earnings Per Share: Continuing
Operations
$ 3.65
$ 0.76
$ 0.17
$ (0.47)
$ 4.11
Six Months Ended June 30, 2023
Continuing Operations
GAAP
Acquisition-
Related
Adjustments (1)
Retirement-
Related
Adjustments (2)
Tax
Reform
Impacts
Operating
(Non-GAAP)
Gross Profit
$ 16,010
$ 298
$ —
$ —
$ 16,308
Gross Profit Margin
53.9
%
1.0
pts
—
pts
—
pts
54.9
%
S,G&A
$ 9,754
$ (491)
$ —
$ —
$ 9,263
Other (Income) & Expense
(506)
(2)
4
—
(504)
Total Expense & Other (Income)
12,952
(493)
4
—
12,463
Pre-tax Income from Continuing Operations
3,058
791
(4)
—
3,845
Pre-tax Income Margin from Continuing
Operations
10.3
%
2.7
pts
0.0
pts
—
pts
12.9
%
Provision for/(Benefit from) Income Taxes (4)
$ 543
$ 178
$ (14)
$ (115)
$ 593
Effective Tax Rate
17.8
%
1.0
pts
(0.3)
pts
(3.0)
pts
15.4
%
Income from Continuing Operations
$ 2,515
$ 613
$ 10
$ 115
$ 3,252
Income Margin from Continuing Operations
8.5
%
2.1
pts
0.0
pts
0.4
pts
10.9
%
Diluted Earnings Per Share: Continuing
Operations
$ 2.74
$ 0.67
$ 0.01
$ 0.13
$ 3.54
____________________
(1) Includes amortization of purchased intangible assets, in process R&D, transaction costs, applicable restructuring and related expenses, tax
charges related to acquisition integration and pre-closing charges, such as financing costs. 2024 also includes a loss of $68 million on foreign
exchange derivative contracts entered into by the company prior to the acquisition of StreamSets and webMethods from Software AG.
(2) Includes amortization of prior service costs, interest cost, expected return on plan assets, amortized actuarial gains/losses, the impacts of any plan
curtailments/settlements and pension insolvency costs and other costs.
(3) 2024 includes a net benefit from discrete tax events.
(4) Tax impact on operating (non-GAAP) pre-tax income from continuing operations is calculated under the same accounting principles applied to the
As Reported pre-tax income under ASC 740, which employs an annual effective tax rate method to the results.
INTERNATIONAL BUSINESS MACHINES CORPORATION
GAAP OPERATING CASH FLOW TO ADJUSTED EBITDA RECONCILIATION
(Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
(Dollars in Billions)
2024
2023
2024
2023
Net Cash Provided by Operating Activities
$ 2.1
$ 2.6
$ 6.2
$ 6.4
Add:
Net interest expense
0.2
0.2
0.4
0.4
Provision for/(Benefit from) income taxes from continuing operations
0.4
0.4
(0.1)
0.5
Less change in:
Financing receivables
(0.9)
0.1
1.0
2.0
Other assets and liabilities/Other, net (1)
(0.4)
(0.5)
(1.5)
(1.2)
Adjusted EBITDA
$ 4.0
$ 3.7
$ 7.1
$ 6.5
____________________
(1) Other assets and liabilities/Other, net mainly consists of Operating assets and liabilities/Other, net in the Cash flow chart, workforce
rebalancing charges, non-operating impacts and corporate (gains) and charges.
View original content to download multimedia:https://www.prnewswire.com/news-releases/ibm-releases-second-quarter-results-302205863.html
SOURCE IBM
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Technology
Global Times: 75 years on, China committed to global common development
Published
56 mins agoon
September 28, 2024By
BEIJING, Sept. 28, 2024 /PRNewswire/ — October 1 this year marks the 75th anniversary of the founding of the People’s Republic of China. Over the past 75 years, under the leadership of the Communist Party of China (CPC), the country has undergone tremendous changes, realizing unprecedented development. China has achieved in a few decades what took developed countries several centuries, with its economy now ranking as the second largest in the world. With strenuous efforts, China has realized its first centenary goal – building a moderately prosperous society in all respects.
China’s influence on the world has never been as profound and long-lasting as it is today. Likewise, the world’s attention to China has never been as deep, and focused as it is now.
As globalization deepens, nations are becoming more interdependent, while various global challenges continue to emerge. Humanity faces natural challenges such as climate change and the loss of biodiversity, as well as common global threats like extreme poverty, nuclear proliferation, political extremism, hegemony, and escalating geopolitical conflicts. The need for cooperation has never been more urgent or important than it is today, experts said.
“Where is humanity headed?” has become a significant question concerning the future and destiny for all.
To answer this question, Chinese President Xi Jinping put forward the vision of building a community with a shared future for humanity in 2013. This is seen as China’s solution to addressing global challenges and creating a better future through concerted efforts of the international community. “The common interest of all humankind is in a world united and peaceful rather than divided and volatile,” Xi said, Xinhua News Agency reported.
Building a community with a shared future for humanity is not about replacing one system with another or one civilization with another. Instead, it is about countries with different social systems, ideologies, historical contexts, and levels of development achieving mutual benefits, sharing rights, and jointly bearing responsibilities in international affairs, experts said.
“Unlike the confrontational or competitive approaches that often dominate international relations, this concept advocates for inclusivity and multilateralism,” Hamad Al Hosani, senior researcher at TRENDS Research and Advisory, a think tank of the United Arab Emirates, told the Global Times. “It also reflects a shift from traditional approach to one that embraces a holistic and interconnected global outlook.”
Hosani added that this concept helps address global challenges by focusing on shared responsibilities, such as equitable resource distribution, environmental stewardship, and collective security measures. It encourages countries to promote a sense of global solidarity and cooperation in managing transnational threats.
China’s vision, embodied in initiatives like the Belt and Road Initiative, focuses on infrastructure investment, trade connectivity, and mutual development without imposing political conditions, Hosani told the Global Times, adding that “this reflects a more pragmatic and cooperative approach that respects the individual paths of nations.”
Therefore, the Chinese path offers developing countries an alternative model of engagement, one that values equal partnership and mutual benefit rather than hierarchical or conditional relationships. “This has attracted many countries, particularly in the Global South, to China’s approach, which they see as less intrusive and more respectful of their developmental needs and choices,” Hosani said.
Li Haidong, a professor at the China Foreign Affairs University, told the Global Times that China has provided substantial aid to the Global South over the past decade and established various organizations such as the Asian Infrastructure Investment Bank (AIIB), which reflect China’s principles of equality, inclusiveness, cooperation, and sustainability.
For a better world
Over the 11 years since the concept of building a community with a shared future for humanity was proposed, China has been both an advocate and a practitioner. Through joint efforts, the Belt and Road Initiative (BRI) has transformed from a Chinese proposal to an international practice, from an idea to concrete actions. It has not only brought tangible benefits to the participating countries but also contributed positively to promoting healthy globalization, addressing global development challenges, and improving global governance.
Projects such as the China-Pakistan Economic Corridor, China-Europe Railway Express, China-Laos Railway, Jakarta-Bandung High-Speed Railway, Piraeus Port, Kopa wind power project have greatly benefited local people. By the end of June 2023, China had signed over 200 cooperation documents with more than 150 countries across five continents and over 30 international organizations under the BRI framework, creating countless iconic projects as well as smaller, people-centered projects.
Bojan Lalic, director of the Belt and Road Institute in Belgrade, told the Global Times that different from the West’s selective alliances, China has opted for a path of inclusive multilateralism, advocating for broader cooperation and promoting inclusive frameworks such as the BRI to facilitate development across numerous nations.
“As developing countries increasingly engage with China, a shift in global power dynamics may occur, enabling a multipolar world where various development models coexist,” Lalic said.
Under the vision of building a community with a shared future for humanity, President Xi proposed the Global Development Initiative, the Global Security Initiative, and the Global Civilization Initiative successively from 2021 to 2023. These three initiatives focus on addressing global development challenges, eliminating global security dilemmas, and promoting exchanges and mutual learning among civilizations.
So far, more than 100 countries and international organizations have voiced support for the Global Development Initiative, with over 70 countries joining this “Group of Friends.” More than 200 development cooperation projects have yielded results, according to the People’s Daily Overseas Edition.
UN Secretary-General António Guterres praised the Global Development Initiative as a “valued contribution to addressing common challenges and accelerating the transition to a more sustainable and inclusive future.”
View original content:https://www.prnewswire.com/news-releases/global-times-75-years-on-china-committed-to-global-common-development-302261718.html
SOURCE Global Times
Technology
Sungrow Liquid-Cooled ESS PowerTitan 2.0 is Set to Unleash the AC Block Era
Published
3 hours agoon
September 28, 2024By
LONDON, Sept. 28, 2024 /PRNewswire/ — Recently, 66 sets of Sungrow’s energy storage system, PowerTitan 2.0, arrived in the UK, demonstrating its acceleration of energy storage deployment in Europe. In the Middle East, over 1,500 sets of PowerTitan 2.0 are set for deployment, contributing to one of the world’s largest energy storage projects with a capacity of 7.8 GWh. Similarly, in Asia, multiple PowerTitan 2.0 projects have been successfully commissioned, showcasing impressive performance in cost reduction, safety, grid forming, etc. PowerTitan 2.0 is being rapidly gaining global traction, pioneering the energy storage industry’s transition into the AC Block era.
What is the AC Block?
PowerTitan 2.0 introduces the revolutionary AC Block, which integrates a 5 MWh battery with a 2.5 MW PCS into a standard 20-foot container, a significant departure from the traditional method of separating direct current battery systems and alternating current PCS systems. This integration goes beyond just rearranging components; it involves efficiently combining the battery, PCS, fire suppression systems, and other modules while pushing the boundaries of spatial design. According to a report by S&P Global Commodity Insight, only three companies worldwide, including Sungrow, currently provide authentic AC Block solutions.
Dr. James Li, Sungrow ESS Director for Europe, stated that the success of PowerTitan 2.0 is significantly attributed to Sungrow’s fully self-developed PACK/BMS/PCS/EMS technologies, driving innovation through a foundational logic and holistic design approach. Moreover, PowerTitan 2.0 revolutionizes PACK structures and production processes, reducing the width of each PACK by 40mm for a more compact layout. Additionally, each cabinet houses 12 small standardized PCS units, matching the size specifications of PACKs for efficient space utilization. These benefits and innovations make the AC Block concept feasible.
With a more compact structure, increased heat dissipation challenges arise. PowerTitan 2.0 addresses this with a Fully Liquid-Cooled solution for battery PACKs and PCS units, ensuring rapid heat dissipation and extending system longevity.
The AC Block: An Optimal Choice
“In the operational projects, PowerTitan 2.0 demonstrates its exceptional competitiveness,” said Dr. James Li. It saves 29% on land usage, requiring only 2000 square meters for a hundred-megawatt-hour system, significantly reducing land costs. The all-in-one AC-DC block design streamlines deployment with embedded PCSs, pre-assembled components, MVT, and comprehensive factory testing to reduce installation time onsite.
Thanks to its innovative AC-DC block design, PowerTitan 2.0 increases the system’s round-trip efficiency (RTE) by 2%, boosts the total discharge volume over the entire lifecycle by 8%, and reduces fault losses by 92%. Moreover, standardized short cable connections between batteries and PCS in a fully liquid-cooled cabinet, along with advanced AI-based battery health management and ArcDefender Technology, effectively minimize thermal runaway and arcing risks, ensuring overall cabinet safety.
The system also incorporates the latest Stem Cell Grid Tech, enabling seamless 0ms grid switching, and active harmonic absorption. It has been widely deployed in global projects such as the SPP Hybrid project in Thailand, the Dalia project in the Middle East, and China’s offshore grid-forming energy storage project in Guangxi. The solution plays a vital role in supporting the smooth operation of new power systems. Notably, PowerTitan 2.0 operates with low noise levels below 75 dBA, utilizing carefully selected biodegradable or renewable transformer oil, refrigerants, and fire extinguishing agents, aligning with environmental sustainability.
Looking ahead, with continuous product innovation and further cost reductions, AC Blocks represented by PowerTitan 2.0 will become the optimal choice in the energy storage market and driving the global energy transition.
Contact:
Mina Zhang
mina.zhang@cn.sungrowpower.com
Logo – https://mma.prnewswire.com/media/1344575/Logo.jpg
View original content:https://www.prnewswire.co.uk/news-releases/sungrow-liquid-cooled-ess-powertitan-2-0-is-set-to-unleash-the-ac-block-era-302261707.html
Technology
Closer China-ASEAN cooperation boosts regional high-quality development
Published
6 hours agoon
September 28, 2024By
NANNING, China, Sept. 28, 2024 /PRNewswire/ — A news report from Beijing Review:
Viet Nam’s aromatic Trung Nguyen coffee, Malaysia’s Musang King durian, Thailand’s fragrant jasmine rice and Laos’ refreshing beer—what do they all have in common?
The answer is they’ve all made an entrance into the vast Chinese market through the China-ASEAN Expo (CAEXPO), earning rave reviews from delighted consumers.
On September 24, the 21st CAEXPO and China-ASEAN Business and Investment Summit kicked off in Nanning, Guangxi Zhuang Autonomous Region. Like a foodie’s fantasy come true and a business bonanza wrapped into one, the expo promised not just to tantalize taste buds but also to turbocharge trade ties between China and its Southeast Asian neighbors.
In addressing the opening ceremony, Chinese Vice Premier Ding Xuexiang said interactions between China and ASEAN have served as the most successful and dynamic model of cooperation in the Asia-Pacific region, and are a vivid example of the building of a community with a shared future for humanity.
Along with the flourishing ties, the expo has become an important supplement to the 10 Plus One cooperation framework between China and ASEAN, providing strong support for regional high-quality development, Luo Yongkun, Deputy Director of the Institute of Southeast Asia and Oceania Studies at the China Institutes of Contemporary International Relations, told Beijing Review.
The expo has been standing as a testament to the enduring friendship, cooperation and shared prosperity between China and ASEAN countries over the years, Kao Kim Hourn, Secretary General of ASEAN, said at the opening ceremony, adding that since its inception in 2004, the event has evolved into an important platform for dialogue, cooperation and development, covering sectors such as infrastructure, agriculture, technology, education and tourism.
“China considers ASEAN a priority in its neighborhood diplomacy and a key region in high-quality Belt and Road cooperation,” Ding said. “ASEAN countries, on their part, see in China a trustworthy and close partner.”
The shared values of peace, cooperation and mutual respect between China and ASEAN form the foundation of their partnership, Vongsey Vissoth, Deputy Prime Minister of Cambodia, said, adding he believes that the two sides can achieve more fruitful results through their cooperation in trade and economy, with the China-ASEAN Free Trade Area bringing new opportunities.
China has been ASEAN’s largest trading partner for 15 consecutive years, while ASEAN has been China’s top trading partner since 2020. The cumulative two-way investment has exceeded $400 billion, according to China’s Ministry of Commerce.
The CAEXPO has made important contributions to the economic integration between ASEAN and China, facilitating investment flows and cross-border economic opportunities, laying the foundation for building a more connected, resilient and dynamic region, Kao said.
In 2010, the China-ASEAN Free Trade Area was officially launched, opening a channel for ASEAN enterprises to gain more efficient and convenient access to the Chinese market.
China’s Vice Minister of Commerce Li Fei said mutually beneficial cooperation between China and ASEAN countries has reached new levels.
Bilateral economic and trade cooperation has continued to upgrade over the years, with positive progress achieved in negotiations for version 3.0 of the China-ASEAN Free Trade Area, he added.
As early as 2015, China and ASEAN initiated the construction of the China-ASEAN Information Harbor to cultivate new drivers of economic development. Today, nearly 20 projects across nine ASEAN countries in fields such as digital government, digital industries and new communications have been conducted under the framework, Luo said.
“We need to leverage the harbor to promote digital connectivity and information sharing, and work for a digital Silk Road,” Ding said in his speech.
At this year’s CAEXPO, a new section was conducted to highlight strategic emerging industries, showcasing the latest progresses and technologies in fields such as digital technology, new energy and intelligent connected vehicles.
Leading Chinese green technology companies are also working closely with ASEAN enterprises and investing in new facilities to produce innovative and locally adapted products, contributing to ASEAN’s green transition.
The ongoing efforts to advance the China-ASEAN Free Trade Area 3.0 will lead to a broader opening up in investment and services trade, Lei Xiaohua, a researcher with the Southeast Asia Research Institute at the Guangxi Academy of Social Sciences, said, adding that the CAEXPO will be endowed with a new mission in future regional industrial and supply chain cooperation.
View original content:https://www.prnewswire.com/apac/news-releases/closer-china-asean-cooperation-boosts-regional-high-quality-development-302261693.html
SOURCE Beijing Review
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