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Exam Code: C9560-503 Practice exam 2022 by Killexams.com team
C9560-503 IBM Tivoli Monitoring V6.3 Fundamentals

Exam Title : IBM Certified Associate - Tivoli Monitoring V6.3
Exam ID : C9560-503
Exam Duration : 90 mins
Questions in exam : 65
Passing Score : 47 / 65
Official Training : IBM Tivoli Monitoring Fundamentals
Exam Center : Pearson VUE
Real Questions : IBM Tivoli Monitoring Fundamentals Real Questions
VCE practice questions : IBM C9560-503 Certification VCE Practice Test

IBM Tivoli Monitoring Infrastructure
- Given a basic understanding of IBM Tivoli Monitoring (ITM), describe ITM and the various components such as IBM Tivoli Enterprise Portal Server (TEPS), Tivoli Enterprise Monitoring Server (TEMS), agents, the data warehouse and event synchronization so that the ITM infrastructure and its functions have been explained.
- Given a basic understanding of ITM, describe the most common Tivoli Enterprise Monitoring Agents and their functions so that the functions of the Tivoli Enterprise Monitoring Agent have been explained.
- Given a basic understanding of ITM, describe the TEMS component and its function so that the purpose of the TEMS has been defined.
- Given a basic understanding of ITM, describe the TEPS component and its function so that the purpose of the TEPS has been defined.
- Given a basic understanding of ITM, describe the TEPS component and its function so that the purpose of the TEPS database has been defined.
- Given a basic understanding of ITM, describe the TEP clients so that the TEP client has been defined.
- Given a basic understanding of ITM, describe the usage of the data warehouse so that the data warehouse has been defined.
- Given basic familiarity with ITM, describe what the Warehouse Proxy agent (WPA) does, what it monitors and where it can be installed so that the functions of the WPA have been defined.
- Given basic familiarity with ITM, describe what the SPA does, what it monitors and where it can be installed so that the SPA has been defined.
- Given basic familiarity with ITM, describe what the Manage Tivoli Enterprise Monitoring Services is, what platforms it runs on and what basic functions it provides so that the functions of the Manage Tivoli Enterprise Monitoring Services have been explained.
- Given basic familiarity with ITM, describe how ITM is able to forward situation events from ITM to Tivoli Netcool/OMNIbus, as well as sync updates in Tivoli Netcool/OMNIbus back into ITM so that the integration between these products has been defined.
- Given the requirement that operations staff get a console view of all incoming and open alerts from ITM and that the ITM Situation Event Console can handle only a limited number of events in any given period successfully, describe why and when would you choose to implement an external event console so that the purpose of when and why to use an external event console has been defined.
- Given basic operator experience with ITM, explain how application support is the collection of configuration data (workspaces, situations, queries, help, Take Actions, etc.) needed by TEMS, TEPS, and the TEP clients that allows ITM data to be viewed by a user so that application support has been defined.

Using Monitoring Data
- Given the need to perform useful event monitoring, and using the workspaces found within the Tivoli Enterprise Portal (TEP), review the various data elements by which a monitoring agent keeps track of the state of a managed system. Determine the current properties and status of these managed systems, using these data elements (attributes), to determine meaningful criteria for analysis so that appropriate thresholds can be determined and defined in situations.
- Given the need to perform useful event monitoring, state how related attributes are packaged together for ease of use in the Tivoli Enterprise Monitoring Server (TEMS) so that attribute groups and their purpose have been defined.
- Given the need of the ITM user to fully understand the data streams within ITM to be able to correctly plan and implement a well performing Monitoring environment, list the data available from ITM and match these with the requirements from the users so that a document with full description of all required monitoring data with their properties is available.
- Given the requirement from the TEP user to have the monitoring data available in a specific format, describe how a TEP view should be adapted to display these data so that the TEP view has been modified and saved.
- Given the requirement to visualize monitoring data on the TEP client according to user requirements, new queries have to be created and used within a View/Workspace so that a new query is now available from the Query selection list.
- Given the requirement of the TEP user to export monitoring data from a TEP view to an external file, describe the actions needed to achieve this so that a new file with monitored data is available from the TEP view.
- Given the requirement from TEP users to visualize monitoring data on the TEP Client in different formats, list the types of views that can be created in a TEP Workspace so that the types of views have been defined.

IBM Tivoli Monitoring Usage
- Given basic familiarity with IBM Tivoli Monitoring V6.3 (ITM), describe how individual components are stopped and started on different platforms, using ITM functionality so that the process to stop/start ITM components has been explained.
- Given a basic understanding of ITM, describe the different types of users, including Administrators, Operations, Support teams, and Management so that the users and their roles have been defined.
- Given the need to create a new user, log on to the TEP, create the user and assign the appropriate permissions so that the user ID has been created and is ready for use.
- Given basic familiarity with ITM, describe what a workspace is, what it can display, its properties, what is delivered as default and what can be changed so that workspaces within ITM have been defined.
- Given the need to enable workspace admin mode, log on to the TEP, grant the required permissions to the selected user ID, log on with the changed user ID and enable workspace admin mode so that the workspace admin mode is enabled.
- Given basic ITM knowledge, describe what level of data can be collected, what the options are to limit or increase the amount of data collected so that ITM data collecting options have been defined.
- Given an existing View on the TEP, describe how you can limit the scope of the rows returned from the Query so that a new view has been modified to the requirements of the TEP user.
- Given the user requirement to visualize a specific time frame of monitoring data for a specific server or servers for a specific set of attributes, explain how this time span should be set on the view so that the modified view reflect the new time selection criteria.
- Given the end user requirements for which monitoring data are to be collected, define an attribute group to be collected with its specific settings so that the historical data files will be created at the TEMA or TEMS and data will be sent to the warehouse.
- Given the requirement of TEP administrators to distribute groups of objects (historical configurations and situations) to the same list(s) of systems, use the Object Group Editor to assign these objects in group to managed systems or lists of managed systems so that historical configurations and situations are grouped to the appropriate servers.
- Given the requirement to launch external applications from the TEP client, describe the main features of this function so that the launch feature has been described.
- Given basic operator experience with ITM, describe how a user can navigate to Take Action on a local or remote managed system and then run an Action (either a pre-defined Action or a custom command) so that the use of Take Action has been defined.

IBM Tivoli Monitoring Navigation
- Given basic experience with IBM Tivoli Monitoring V6.3 (ITM), explain how the Navigator view provides access to the data that ITM collects via a hierarchical structure (Physical by default, Custom/Logical when defined as needed) so that the functions of the navigator tree have been explained.
- Given basic familiarity with ITM, describe how one can use the Edit Navigator View button from the Tivoli Enterprise Portal (TEP) client to create a new Navigator View so that the process to create a new Navigator view is defined.
- Given basic familiarity with ITM, describe what a Logical Navigator View is and why it might be used (as opposed to the default Physical Navigator View) so that the use of a Logical Navigator View is understood.
- Given basic familiarity with ITM, describe how a user can navigate from the default workspace to another workspace for the same Navigator item so that the capability to attach multiple workspaces to a single Navigator item is demonstrated.
- Given basic familiarity with ITM, describe how to link workspaces in the TEP client so that navigating to one particular workspace directly from another workspace is illustrated.

IBM Tivoli Monitoring Event Management
- Given the need to perform useful event monitoring, and using the Tivoli Enterprise Portal (TEP) features found in the situation editor, determine how related managed systems are grouped together for ease of replication of common analysis criteria so that when a situation is added or changed, the change is proliferated across all related managed systems, reducing error and providing consistency.
- Given the need to perform proactive event management at times, and using the features provided in the TEP, state reasons why event analysis with alerts is enough (based on a situation), and when there are times that more automated actions are required (based on a policy).
- Given the need to perform proactive event management at times, and using the features provided in the TEP, state reasons why the ITM framework event analysis would be conducted by sampling of data, as opposed to the determination of a pure event so that the difference between pure and sampled events has been defined.
- Given the need to perform event management and analysis to reduce business outages, and using the features provided in the TEP, describe the steps at a high level of setting up a situation and assigning it to a managed system so that a situation has been set-up and assigned.
- Given the need to perform event management and analysis to reduce business outages, and using the features provided in the TEP, describe how and why one would use the feature 'Situation Persistence' when defining a situation.
- Given the need to perform event management and analysis to reduce business outages and to find quick resolutions, using the features provided in the TEP, describe the difference between creating a situation from the situation editor (start from icon), or creating a situation from the navigator tree so that the various ways to create a situation have been described.
- Given the need to perform event management and analysis to reduce business outages and to find quick resolutions, using the features provided in the TEP, describe how and why one would use the feature 'Event Acknowledgement', to take ownership of a situation event when it occurs so that the Event Acknowledge feature has been explained.
- Given basic familiarity with ITM, describe how pure and sampled situation events are closed so that the difference between pure events and sampled events is defined.
- Given the need to perform event management and analysis, to reduce business outages and to find quick resolutions, using the features provided in the TEP, describe how and why one would need to associate a situation with a navigator item so that how to associate a situation with a navigator item has been defined.
- Given the need to perform event management and analysis to reduce business outages and to find quick resolutions, using the features provided in the TEP, describe how and why one would use the feature 'Expert Advice' when defining a situation so that the Expert Advice feature has been described.
- Given basic familiarity with ITM, describe the differences between reflex automation and workflow automation so that users can distinguish between the two.
- Given basic familiarity with ITM, describe the kind of data that can be used in a situation and displayed in a situation event so that the use of Display Item in situations is defined.
- Given basic familiarity with ITM, describe the function of monitored, statistical, and historical baselines in a data view so that the value of using monitored baselines in a view is understood.

Fundamentals of IBM Tivoli Monitoring Problem Determination
- Given basic knowledge of IBM Tivoli Monitoring V6.3 (ITM), describe how a user can determine if a component of the ITM is failing so that a user can determine what may be failing within the ITM architecture.

IBM Tivoli Monitoring V6.3 Fundamentals
IBM Fundamentals health
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Growth Across Key Segments Led by Hybrid Cloud Adoption; Solid Cash and Profit Generation

ARMONK, N.Y., July 18, 2022 /PRNewswire/ -- IBM (NYSE: IBM) today announced second-quarter 2022 earnings results.

IBM Corporation logo. (PRNewsfoto/IBM)

"In the quarter we delivered good revenue performance with balanced growth across our geographies, driven by client demand for our hybrid cloud and AI offerings. The IBM team executed our strategy well," said Arvind Krishna, IBM chairman and chief executive officer. "With our first half results, we continue to expect full-year revenue growth at the high end of our mid-single digit model."

Second-Quarter Highlights

  • Revenue
    - Revenue of $15.5 billion, up 9 percent, up 16 percent at constant currency (about 5 points from sales to Kyndryl)
    - Software revenue up 6 percent, up 12 percent at constant currency (about 7 points from sales to Kyndryl)
    - Consulting revenue up 10 percent, up 18 percent at constant currency
    - Infrastructure revenue up 19 percent, up 25 percent at constant currency (about 7 points from sales to Kyndryl)
    - Hybrid cloud revenue, over the last 12 months, of $21.7 billion, up 16 percent, up 19 percent at constant currency
  • Cash Flow
    - On a consolidated basis, year to date, net cash from operating activities of $4.6 billion; free cash flow of $3.3 billion 
SECOND QUARTER 2022 INCOME STATEMENT SUMMARY
Pre-tax 
Gross Pre-tax  Income  Net  Diluted 
Revenue Profit Income Margin Income EPS
GAAP from
Continuing
Operations
$ 15.5B $ 8.3B $ 1.7B 11.1 % $ 1.5B $ 1.61
    Year/Year 9 %* 6 % 89 % 4.7 Pts 81 % 79 %
Operating
(Non-GAAP)
$ 8.5B $ 2.5B 16.2 % $ 2.1B $ 2.31
    Year/Year 5 % 48 % 4.2 Pts 45 % 43 %
*16% at constant currency

"We are a faster-growing, focused, disciplined company with sound business fundamentals," said James Kavanaugh, IBM senior vice president and chief financial officer. "Our recurring revenue stream and solid cash generation position us well to continue to invest in R&D, acquire new companies, and strengthen our talent in every part of the business, while also returning value to shareholders through our dividend."

Segment Results for Second Quarter

  • Software (includes Hybrid Platform & Solutions, Transaction Processing)— revenues of $6.2 billion, up 6.4 percent, up 11.6 percent at constant currency (about 7 points from sales to Kyndryl):
    - Hybrid Platform & Solutions up 4 percent, up 9 percent at constant currency (about 1.5 points from sales to Kyndryl):
       -- Red Hat up 12 percent, up 17 percent at constant currency
       -- Automation up 4 percent, up 8 percent at constant currency
       -- Data & AI flat, up 4 percent at constant currency
       -- Security flat, up 5 percent at constant currency
    - Transaction Processing up 12 percent, up 19 percent at constant currency (about 22 points from sales to Kyndryl)
    - Software segment hybrid cloud revenue up 14 percent, up 18 percent at constant currency
  • Consulting (includes Business Transformation, Technology Consulting and Application Operations)— revenues of $4.8 billion, up 9.8 percent, up 17.8 percent at constant currency:
    - Business Transformation up 9 percent, up 16 percent at constant currency
    - Technology Consulting up 14 percent, up 23 percent at constant currency
    - Application Operations up 9 percent, up 17 percent at constant currency
    - Consulting segment hybrid cloud revenue up 20 percent, up 29 percent at constant currency
  • Infrastructure (includes Hybrid Infrastructure, Infrastructure Support)— revenues of $4.2 billion, up 19.0 percent, up 25.4 percent at constant currency (about 7 points from sales to Kyndryl):
    - Hybrid Infrastructure up 34 percent, up 41 percent at constant currency (about 7 points from sales to Kyndryl)
       -- IBM z Systems up 69 percent, up 77 percent at constant currency
       -- Distributed Infrastructure up 11 percent, up 17 percent at constant currency
    - Infrastructure Support down 2 percent, up 5 percent at constant currency (about 8 points from sales to Kyndryl)
    - Infrastructure segment hybrid cloud revenue up 24 percent, up 30 percent at constant currency
  • Financing (includes client and commercial financing)— revenues of $0.1 billion, down 29.9 percent, down 26.6 percent at constant currency

Cash Flow and Balance Sheet
On a consolidated basis, in the second quarter, the company generated net cash from operating activities of $1.3 billion or $2.6 billion excluding IBM Financing receivables. IBM's free cash flow was $2.1 billion. The company returned $1.5 billion to shareholders in dividends in the second quarter.

On a consolidated basis, for the first six months of the year, the company generated net cash from operating activities of $4.6 billion or $4.2 billion excluding IBM Financing receivables. IBM's free cash flow was $3.3 billion, which includes cash impacts from the company's structural actions initiated at the end of 2020.

IBM ended the second quarter with $7.8 billion of cash on hand (which includes marketable securities), up $0.2 billion from year-end 2021. Debt, including IBM Financing debt of $12.3 billion, totaled $50.3 billion, down $1.4 billion since the end of 2021.

Full-Year 2022 Expectations

  • Revenue growth: The company continues to expect constant currency revenue growth at the high end of its mid-single digit model. The company also expects an additional 3.5 point contribution from incremental sales to Kyndryl. At mid-July 2022 foreign exchange rates, currency is expected to be about a six-point headwind.
  • Free Cash Flow: The company now expects about $10 billion in consolidated 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. 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
On November 3, 2021, IBM completed the separation of Kyndryl. Unless otherwise specified, results are presented on a continuing operations basis. All references to revenue impacts from sales to Kyndryl are incremental sales post-separation.

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;
  • consolidated free cash flow;
  • consolidated cash from operating activities excluding IBM Financing receivables;

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.

Conference Call and Webcast
IBM's regular quarterly earnings conference call is scheduled to begin at 5:00 p.m. EDT, today. The Webcast may be accessed via a link at https://www.ibm.com/investor/events/earnings-2q22. 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 Six Months Ended
June 30,  June 30, 
2022 2021* 2022 2021*
REVENUE
Software $ 6,166 $ 5,795 $ 11,938 $ 10,933
Consulting 4,809 4,378 9,637 8,641
Infrastructure 4,235 3,560 7,453 6,853
Financing 146 209 300 417
Other 180 277 404 561
TOTAL REVENUE 15,535 14,218 29,732 27,405
GROSS PROFIT 8,290 7,852 15,625 14,879
GROSS PROFIT MARGIN
Software 79.2 % 79.7 % 79.0 % 78.8 %
Consulting 24.2 % 27.6 % 24.3 % 27.7 %
Infrastructure 53.8 % 57.1 % 52.4 % 56.7 %
Financing 35.3 % 29.9 % 36.5 % 32.7 %
TOTAL GROSS PROFIT MARGIN 53.4 % 55.2 % 52.6 % 54.3 %
EXPENSE AND OTHER INCOME
S,G&A 4,855 4,849 9,452 9,536
R,D&E 1,673 1,641 3,352 3,257
Intellectual property and custom development income (176) (133) (297) (278)
Other (income) and expense (81) 302 166 647
Interest expense 297 281 607 561
TOTAL EXPENSE AND OTHER INCOME 6,568 6,940 13,280 13,724
INCOME/(LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 1,722 912 2,345 1,155
Pre-tax margin 11.1 % 6.4 % 7.9 % 4.2 %
Provision for/(Benefit from) income taxes 257 101 218 (58)
Effective tax rate 14.9 % 11.1 % 9.3 % (5.0) %
INCOME FROM CONTINUING OPERATIONS $ 1,465 $ 810 $ 2,127 $ 1,213
DISCONTINUED OPERATIONS
Income/(Loss) from discontinued operations, net of taxes (73) 515 (2) 1,067
NET INCOME $ 1,392 $ 1,325 $ 2,125 $ 2,280
EARNINGS/(LOSS) PER SHARE OF COMMON STOCK
Assuming Dilution
Continuing Operations $ 1.61 $ 0.90 $ 2.34 $ 1.34
Discontinued Operations $ (0.08) $ 0.57 $ 0.00 $ 1.18
TOTAL $ 1.53 $ 1.47 $ 2.34 $ 2.52
Basic
Continuing Operations $ 1.62 $ 0.91 $ 2.36 $ 1.36
Discontinued Operations $ (0.08) $ 0.57 $ 0.00 $ 1.19
TOTAL $ 1.54 $ 1.48 $ 2.36 $ 2.55
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (M's)
Assuming Dilution 910.7 904.2 910.0 903.0
Basic 901.5 895.0 900.4 894.3
____________________
* Recast to conform with 2022 presentation.

 

INTERNATIONAL BUSINESS MACHINES CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
At At
June 30,  December 31, 
(Dollars in Millions) 2022 2021
ASSETS:
Current Assets:
Cash and cash equivalents $ 7,034 $ 6,650
Restricted cash 220 307
Marketable securities 524 600
Notes and accounts receivable - trade, net 5,867 6,754
Short-term financing receivables, net 7,233 8,014
Other accounts receivable, net 909 1,002
Inventories 1,684 1,649
Deferred costs 1,010 1,097
Prepaid expenses and other current assets 3,414 3,466
Total Current Assets 27,896 29,539
Property, plant and equipment, net 5,275 5,694
Operating right-of-use assets, net 2,848 3,222
Long-term financing receivables, net 5,316 5,425
Prepaid pension assets 9,930 9,850
Deferred costs 865 924
Deferred taxes 7,073 7,370
Goodwill 55,039 55,643
Intangibles, net 11,571 12,511
Investments and sundry assets 1,689 1,823
Total Assets $ 127,503 $ 132,001
LIABILITIES:
Current Liabilities:
Taxes $ 1,742 $ 2,289
Short-term debt 5,981 6,787
Accounts payable 3,707 3,955
Deferred income 12,522 12,518
Operating lease liabilities 884 974
Other liabilities 7,008 7,097
Total Current Liabilities 31,844 33,619
Long-term debt 44,328 44,917
Retirement related obligations 13,118 14,435
Deferred income 3,069 3,577
Operating lease liabilities 2,182 2,462
Other liabilities 13,486 13,996
Total Liabilities 108,026 113,005
EQUITY:
IBM Stockholders' Equity:
Common stock 57,802 57,319
Retained earnings 153,298 154,209
Treasury stock — at cost (169,522) (169,392)
Accumulated other comprehensive income/(loss) (22,169) (23,234)
Total IBM Stockholders' Equity 19,409 18,901
Noncontrolling interests 67 95
Total Equity 19,476 18,996
Total Liabilities and Equity $ 127,503 $ 132,001

 

INTERNATIONAL BUSINESS MACHINES CORPORATION CASH FLOW ANALYSIS (Unaudited)
Trailing Twelve
Three Months Ended Six Months Ended Months Ended
June 30,  June 30,  June 30, 
(Dollars in Millions) 2022 2021 2022 2021 2022
Consolidated Net Cash from Operations per GAAP $ 1,321 $ 2,625 $ 4,569 $ 7,539 $ 9,826
Less: change in IBM Financing receivables (1,264) 900 367 3,763 511
Capital Expenditures, net (494) (688) (871) (1,217) (2,035)
Consolidated Free Cash Flow 2,091 1,037 3,331 2,559 7,279
Acquisitions (260) (1,747) (958) (2,866) (1,385)
Divestitures 1,207 (10) 1,268 (25) 1,408
Dividends (1,488) (1,467) (2,963) (2,924) (5,907)
Non-Financing Debt (2,934) (586) 1,740 (2,331) 2,880
Other (includes IBM Financing net receivables and debt) (1,607) (335) (2,197) (522) (4,661)
Change in Cash, Cash Equivalents, Restricted Cash and Short-term
Marketable Securities*
$ (2,991) $ (3,108) $ 221 $ (6,110) $ (387)
____________________
* Cash flows are presented on a consolidated basis. 

 

INTERNATIONAL BUSINESS MACHINES CORPORATION CASH FLOW (Unaudited)
Three Months Ended Six Months Ended
June 30,  June 30, 
(Dollars in Millions) 2022 2021 2022 2021
Net Income from Operations $ 1,392 $ 1,325 $ 2,125 $ 2,280
Depreciation/Amortization of Intangibles 1,245 1,680 2,501 3,352
Stock-based Compensation 254 243 488 457
Working Capital / Other (307) (1,524) (912) (2,313)
IBM Financing A/R (1,264) 900 367 3,763
Net Cash Provided by Operating Activities $ 1,321 $ 2,625 $ 4,569 $ 7,539
Capital Expenditures, net of payments & proceeds (494) (688) (871) (1,217)
Divestitures, net of cash transferred 1,207 (10) 1,268 (25)
Acquisitions, net of cash acquired (260) (1,747) (958) (2,866)
Marketable Securities / Other Investments, net (281) (227) (625) (562)
Net Cash Provided by/(Used in) Investing Activities $ 172 $ (2,671) $ (1,186) $ (4,671)
Debt, net of payments & proceeds (2,514) (1,500) 434 (5,799)
Dividends (1,488) (1,467) (2,963) (2,924)
Financing - Other (195) (163) (290) (190)
Net Cash Provided by/(Used in) Financing Activities $ (4,197) $ (3,131) $ (2,819) $ (8,914)
Effect of Exchange Rate changes on Cash (262) 69 (267) (65)
Net Change in Cash, Cash Equivalents and Restricted Cash* $ (2,965) $ (3,108) $ 297 $ (6,110)
____________________
* Cash flows are presented on a consolidated basis. 

 

INTERNATIONAL BUSINESS MACHINES CORPORATION SEGMENT DATA (Unaudited)
Three Months Ended June 30, 2022
(Dollars in Millions) Software Consulting Infrastructure Financing
Revenue $ 6,166 $ 4,809 $ 4,235 $ 146
Pre-tax Income/(Loss) from Continuing Operations $ 1,375 $ 343 $ 757 $ 102
Pre-tax Margin 22.3 % 7.1 % 17.9 % 69.7 %
Change YTY Revenue 6.4 % 9.8 % 19.0 % (29.9) %
Change YTY Revenue - constant currency 11.6 % 17.8 % 25.4 % (26.6) %
Three Months Ended June 30, 2021*
(Dollars in Millions) Software Consulting Infrastructure Financing
Revenue $ 5,795 $ 4,378 $ 3,560 $ 209
Pre-tax Income/(Loss) from Continuing Operations $ 1,059 $ 270 $ 489 $ 131
Pre-tax Margin 18.3 % 6.2 % 13.7 % 63.0 %
____________________
* Recast to conform with 2022 presentation. 
Six Months Ended June 30, 2022
(Dollars in Millions) Software Consulting Infrastructure Financing
Revenue $ 11,938 $ 9,637 $ 7,453 $ 300
Pre-tax Income/(Loss) from Continuing Operations $ 2,509 $ 691 $ 956 $ 186
Pre-tax Margin 21.0 % 7.2 % 12.8 % 62.0 %
Change YTY Revenue 9.2 % 11.5 % 8.8 % (28.0) %
Change YTY Revenue - constant currency 13.4 % 17.6 % 13.4 % (25.5) %
Six Months Ended June 30, 2021*
(Dollars in Millions) Software Consulting Infrastructure Financing
Revenue $ 10,933 $ 8,641 $ 6,853 $ 417
Pre-tax Income/(Loss) from Continuing Operations $ 1,717 $ 547 $ 780 $ 229
Pre-tax Margin 15.7 % 6.3 % 11.4 % 55.0 %
____________________
* Recast to conform with 2022 presentation.

 

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, 2022
Continuing Operations
Acquisition- Retirement- Tax Kyndryl-
Related Related Reform Related Operating
GAAP Adjustments Adjustments Impacts Impacts (Non-GAAP)
Gross Profit $ 8,290 $ 180 $ $ $ $ 8,470
Gross Profit Margin 53.4 % 1.2  pts.    pts.    pts.    pts.   54.5 %
S,G&A $ 4,855 $ (279) $ $ $ (0) $ 4,576
Other (Income) & Expense (81) (1) (192) (145) (418)
Total Expense & Other (Income) 6,568 (280) (192) (145) 5,952
Pre-tax Income from Continuing 1,722 460 192 145 2,518
Pre-tax Income Margin from 11.1 % 3.0  pts.   1.2  pts.    pts.   0.9  pts.   16.2 %
Provision for/(Benefit from) Income $ 257 $ 115 $ 46 $ (4) $ $ 413
Effective Tax Rate 14.9 % 1.8  pts.   0.7  pts.   (0.2)  pts.   (0.9)  pts.   16.4 %
Income from Continuing Operations $ 1,465 $ 345 $ 146 $ 4 $ 145 $ 2,105
Income Margin from Continuing 9.4 % 2.2  pts.   0.9  pts.   0.0  pts.   0.9  pts.   13.5 %
Diluted Earnings/(Loss) Per Share: $ 1.61 $ 0.38 $ 0.16 $ 0.00 $ 0.16 $ 2.31
Three Months Ended June 30, 2021
Continuing Operations
Acquisition- Retirement- Tax Kyndryl-
Related Related Reform Related Operating
GAAP Adjustments Adjustments Impacts Impacts (Non-GAAP)
Gross Profit $ 7,852 $ 179 $ $ $ $ 8,031
Gross Profit Margin 55.2 % 1.3  pts.    pts.    pts.    pts.   56.5 %
S,G&A $ 4,849 $ (294) $ $ $ $ 4,555
Other (Income) & Expense 302 (1) (317) (16)
Total Expense & Other (Income) 6,940 (294) (317) 6,329
Pre-tax Income/(Loss) from Continuing 912 474 317 1,702
Pre-tax Income Margin from 6.4 % 3.3  pts.   2.2  pts.    pts.    pts.   12.0 %
Provision for/(Benefit from) Income $ 101 $ 105 $ 53 $ (14) $ $ 246
Effective Tax Rate 11.1 % 3.1  pts.   1.0  pts.   (0.8)  pts.    pts.   14.5 %
Income from Continuing Operations $ 810 $ 368 $ 264 $ 14 $ $ 1,456
Income Margin from Continuing 5.7 % 2.6  pts.   1.9  pts.   0.1  pts.    pts.   10.2 %
Diluted Earnings/(Loss) Per Share: $ 0.90 $ 0.41 $ 0.29 $ 0.01 $ $ 1.61
____________________
(1)  Includes amortization of purchased intangible assets, in process R&D, transaction costs, applicable restructuring and related expenses, tax charges related to acquisition
(2)  Includes amortization of prior service costs, interest cost, expected return on plan assets, amortized actuarial gains/losses, the impacts of any plan curtailments/
(3)  Primarily relates to the fair value changes in the retained Kyndryl common stock and the related cash-settled swap.
(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

 

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, 2022
Continuing Operations
Acquisition- Retirement- Tax Kyndryl-
Related Related Reform Related Operating
GAAP Adjustments Adjustments Impacts Impacts (Non-GAAP)
Gross Profit $ 15,625 $ 361 $ $ $ $ 15,986
Gross Profit Margin 52.6 % 1.2  pts.    pts.    pts.    pts.   53.8 %
S,G&A $ 9,452 $ (565) $ $ $ (0) $ 8,887
Other (Income) & Expense 166 (1) (394) (367) (596)
Total Expense & Other (Income) 13,280 (566) (394) (367) 11,953
Pre-tax Income from Continuing 2,345 928 394 367 4,033
Pre-tax Income Margin from 7.9 % 3.1  pts.   1.3  pts.    pts.   1.2  pts.   13.6 %
Provision for/(Benefit from) Income $ 218 $ 224 $ 104 $ 112 $ $ 657
Effective Tax Rate 9.3 % 3.4  pts.   1.7  pts.   2.8  pts.   (0.8)  pts.   16.3 %
Income from Continuing Operations $ 2,127 $ 704 $ 290 $ (112) $ 367 $ 3,376
Income Margin from Continuing 7.2 % 2.4  pts.   1.0  pts.   (0.4)  pts.   1.2  pts.   11.4 %
Diluted Earnings/(Loss) Per Share: $ 2.34 $ 0.77 $ 0.32 $ (0.12) $ 0.40 $ 3.71
Six Months Ended June 30, 2021
Continuing Operations
Acquisition- Retirement- Tax Kyndryl-
Related Related Reform Related Operating
GAAP Adjustments Adjustments Impacts Impacts (Non-GAAP)
Gross Profit $ 14,879 $ 353 $ $ $ $ 15,232
Gross Profit Margin 54.3 % 1.3  pts.    pts.    pts.    pts.   55.6 %
S,G&A $ 9,536 $ (582) $ $ $ $ 8,954
Other (Income) & Expense 647 (1) (649) (3)
Total Expense & Other (Income) 13,724 (583) (649) 12,491
Pre-tax Income from Continuing 1,155 936 649 2,741
Pre-tax Income Margin from 4.2 % 3.4  pts.   2.4  pts.    pts.    pts.   10.0 %
Provision for/(Benefit from) Income $ (58) $ 238 $ 86 $ 6 $ $ 272
Effective Tax Rate (5.0) % 10.4  pts.   4.3  pts.   0.2  pts.    pts.   9.9 %
Income from Continuing Operations $ 1,213 $ 699 $ 563 $ (6) $ $ 2,469
Income Margin from Continuing 4.4 % 2.5  pts.   2.1  pts.   (0.0)  pts.    pts.   9.0 %
Diluted Earnings/(Loss) Per Share: $ 1.34 $ 0.77 $ 0.62 $ (0.01) $ $ 2.73
____________________
(1)  Includes amortization of purchased intangible assets, in process R&D, transaction costs, applicable restructuring and related expenses, tax charges related
(2)  Includes amortization of prior service costs, interest cost, expected return on plan assets, amortized actuarial gains/losses, the impacts of any plan
(3)  Primarily relates to the fair value changes in the retained Kyndryl common stock and the related cash-settled swap.
(4)  Tax impact on operating (non-GAAP) pre-tax income from continuing operations is calculated under the same accounting principles applied to the As

 

 

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Killexams : 11 Higher-Yielding And Far Better Blue-Chip Alternatives To AT&T
Happy businessman and flying dollar banknotes

Prostock-Studio

AT&T (T) is one of the most controversial stocks on Seeking Alpha and for good reason. This failed aristocrat succumbed to poor management and costly and debt-laden empire building that showcases that even the mightiest blue-chips can fall.

x

Charlie Bilello

AT&T was once the largest company in America, and so was IBM (IBM). Sears was once the 6th largest and is now bankrupt as are former dividend kings Winn Dixie and Kmart.

General Electric (GE), another former aristocrat, is still down almost 90% off its tech bubble highs, after briefly becoming the most valuable company on earth.

There are no sacred cows in finance, and the prudent long-term investor follows the fundamentals wherever they lead.

"When the facts change I change my mind, what do you do sir?" - John Maynard Keynes

Several Dividend Kings members have asked me to take another look at AT&T, to see whether or not this fallen aristocrat has a chance of rising like a Phoenix from the ashes and soaring to new heights.

To answer that question there are three things we must look at:

  • the balance sheet
  • the dividend safety
  • the long-term return outlook

So let's take a look at the three things prospective AT&T investors need to know, and why 11 higher-yielding and far superior blue-chips are the best place for your hard-earned savings today.

Fact One: The Balance Sheet Is Improving Slowly But Surely

There is nothing more important for long-term investing success than a strong balance sheet. If a company defaults on its debt, it almost always files for bankruptcy and the stock goes to zero.

"In order to win the game first you must not lose it." - Chuck Noll

AT&T Credit Ratings

Rating Agency Credit Rating 30-Year Default/Bankruptcy Risk Chance of Losing 100% Of Your Investment 1 In
S&P BBB Stable Outlook 7.50% 13.3
Fitch BBB+ Stable Outlook 5.00% 20.0
Moody's Baa2 (BBB equivalent) Stable Outlook 7.50% 13.3
Consensus BBB Stable Outlook 6.67% 15.0

(Source: S&P, Fitch, Moody's)

Rating agencies estimate AT&T's fundamental risk at 6.7%, a 1 in 15 chance of losing all your money in the next 30 years.

Why? Because the spinoff of WarnerMedia along with some of its debt and that nasty dividend cut has helped set AT&T on the path to financial health.

AT&T Consensus Leverage Forecast

Year Debt/EBITDA Net Debt/EBITDA (3.5 Or Less Safe According To Credit Rating Agencies)

Interest Coverage (4+ Safe)

2020 2.88 2.70 0.81
2021 3.46 3.06 3.39
2022 3.69 3.03 3.64
2023 3.44 2.77 4.29
2024 2.88 2.54 4.93
2025 2.86 2.48 4.70
2026 2.89 2.64 3.61
2027 2.62 NA 4.81
Annualized Change -1.37% -0.38% 29.03%

(Source: FactSet Research Terminal)

AT&T's leverage peaked at 3.7 pre-spin-off and is expected to fall rapidly. Its interest coverage ratio is expected to remain stable around the 4 minimum safety guideline for stable BBB-rated companies.

AT&T Consensus Leverage Forecast

Year Total Debt (Millions) Cash Net Debt (Millions) Interest Cost (Millions) EBITDA (Millions) Operating Income (Millions)
2020 $157,245 $9,740 $147,505 $7,925 $54,546 $6,405
2021 $177,977 $21,169 $157,379 $6,884 $51,469 $23,347
2022 $155,499 $19,970 $127,519 $6,202 $42,154 $22,569
2023 $148,884 $20,063 $119,858 $5,601 $43,247 $24,015
2024 $127,251 $16,795 $112,489 $5,140 $44,245 $25,347
2025 $127,251 $19,874 $110,491 $5,482 $44,535 $25,744
2026 $127,251 $31,778 $116,500 $7,067 $44,080 $25,520
2027 $127,251 $82,067 NA $6,194 $48,613 $29,815
Annualized Growth -2.98% 35.59% -3.86% -3.46% -1.63% 24.57%

(Source: FactSet Research Terminal)

Rising interest rates in the future are expected to keep AT&T's ability to service its debt manageable, but not so easy as to likely result in credit rating upgrades.

x

(Source: FactSet Research Terminal)

The bond market is getting a bit more thinking about AT&T's ability to service its debt, possibly due to rising recession concerns.

1-year default risk has risen by 150% in the last six months according to the bond market and 10-year default risk is up 49%.

However, the bond market is estimating a 30-year default risk at just over 4.5%, which is consistent with its existing credit ratings.

Or to put it another way, analysts, management, rating agencies, and the bond market all think that AT&T's turnaround plan remains on track, though management's initial guidance for 5% long-term growth appears to be unlikely.

Fact Two: Dividend Safety Remains Shaky At Best

The safest dividends are often the ones that's just been raised and the most dangerous can be from companies that have already cut in the exact past.

With AT&T almost halving its dividend and breaking the hearts of many dividend aristocrat investors, one of the most important questions we need to be answered is how safe is the dividend and is it likely to grow over time?

AT&T Dividend Consensus Forecast

Year Dividend Consensus FCF/Share Consensus FCF Payout Ratio Retained (Post-Dividend) Free Cash Flow Buyback Potential Debt Repayment Potential
2022 $1.22 $2.11 57.8% $6,372 4.34% 4.1%
2023 $1.10 $2.48 44.4% $9,879 6.73% 6.6%
2024 $1.10 $2.36 46.6% $9,020 6.14% 6.1%
2025 $1.09 $2.50 43.6% $10,094 6.87% 7.9%
2026 $1.18 $2.32 50.9% $8,161 5.56% 6.4%
2027 $1.20 $2.90 41.4% $12,170 8.28% 9.6%
Total 2022 Through 2027 $6.89 $14.67 47.0% $55,697.02 37.91% 37.41%
Annualized Rate -0.33% 6.57% -6.47% 13.82% 13.82% 18.47%

(Source: FactSet Research Terminal)

The good news is that most analysts don't expect AT&T to cut more. The bad news is that some due and the consensus is that the payout will basically stay flat for the next five years.

That's despite a payout ratio of under 50% compared to 70% that rating agencies consider safe for telecoms.

AT&T is expected to retain $56 billion in post-dividend free cash flow over the next five years. That's enough to potentially pay off 37% of its debt or buy back up to 38% of its stock at current valuations.

But don't get too excited about the potential for mega-buybacks.

AT&T Buyback Consensus Forecast

Year Consensus Buybacks ($ Millions) % Of Shares (At Current Valuations) Market Cap
2022 $205.0 0.1% $146,903
2023 $74.0 0.1% $146,903
2024 $111.0 0.1% $146,903
2025 $611.0 0.4% $146,903
2026 $611.0 0.4% $146,903
Total 2022-2026 $1,612.00 1.1% $146,903
Annualized Rate 0.16% Average Annual Buybacks $322.40

(Source: FactSet Research Terminal)

Analysts only expect $1.6 billion in total buybacks through 2026, roughly enough for 1% of the shares at current valuations.

So where is that retained cash flow going? Well, management hopes into growing the core telecom business. On that front, there is some good and bad news.

Fact Three: AT&T MIGHT Make A Decent Long-Term Investment If You Have Realistic Expectations

x

(Source: FactSet Research Terminal)

AT&T's spin-off of WarnerMedia means that it's not expected to recover that free cash flow, not even close. Even in 2027, analysts expect free cash flow will be 24% below 2020's record, eight years of negative free cash flow growth.

But that doesn't mean that analysts don't expect AT&T to grow its earnings.

x

(Source: FactSet Research Terminal)

It will take until 2027 according to analysts for AT&T to hit a new record EPS, surpassing 2019's $2.7 per share.

But over the long-term, the median consensus from all 29 analysts is that AT&T can grow at 3.4%.

  • Verizon (VZ)'s consensus is 4.0%

What does this potentially mean for long-term AT&T investors?

Investment Strategy Yield LT Consensus Growth LT Consensus Total Return Potential Long-Term Risk-Adjusted Expected Return Long-Term Inflation And Risk-Adjusted Expected Returns Years To Double Your Inflation & Risk-Adjusted Wealth

10-Year Inflation And Risk-Adjusted Expected Return

AT&T 5.4% 3.4% 8.8% 6.2% 3.7% 19.5 1.44
Verizon 5.0% 4% 9.0% 6.3% 3.8% 18.8 1.46
Dividend Aristocrats 2.6% 8.6% 11.2% 7.8% 5.4% 13.4 1.69
S&P 500 1.8% 8.5% 10.3% 7.1% 4.7% 15.4 1.58

(Source: Morningstar, FactSet, Ycharts)

That AT&T could potentially deliver decent long-term total returns of about 9%, slightly less than Verizon and a lot less than the dividend aristocrats or S&P 500.

How realistic is it to believe that AT&T can deliver 9% long-term returns?

AT&T And Verizon Total Returns Since May 1985

x

(Source: Portfolio Visualizer Premium)

AT&T has underperformed VZ by 0.3% annually for 37 years, and analysts expect it to keep doing so in the future.

It's delivered 9% long-term returns just as analysts expect from it today.

x

(Source: Portfolio Visualizer Premium)

AT&T's rolling returns are consistent with what analysts expect in the future, with modest returns almost all coming from dividends. However, remember that these are long-term returns, and in the short-term, any company can disappoint, even for a decade.

x

(Source: Portfolio Visualizer Premium)

AT&T is finally having a moment in the sun, up 19% in the last three months and up almost 17% YTD. But it's delivered almost zero inflation-adjusted returns over the last decade, thanks to former management's penchant for expensive debt-funded M&A.

Now AT&T is focused on its circle of competence, telecom, and analysts and rating agencies are the most optimistic they've been in about five years at AT&T's prospects, though admittedly that's damning with faint praise.

But the good news is that AT&T investors likely don't have to wait for decades to earn solid returns, potentially even Buffett-like short-term gains.

AT&T 2024 Consensus Return Potential

x

(Source: FAST Graphs, FactSet Research)

AT&T offers about 20% annual total return potential according to analysts over the next 2.5 years.

However, just because AT&T isn't a dumpster fire of a company doesn't mean it's actually worth buying.

Let me show you how to stop settling for low-quality yield and instead harness the power of the world's mightiest and highest quality high-yield blue-chips.

How To Find Some Of The World's Best High-Yield Blue-Chips In All Market Conditions

I use the Dividend Kings Zen Research Terminal to always find the best blue-chips for any given goal, time horizon or risk profile. This super easy and convenient tool runs of the Dividend Kings 500 Master List.

The DK 500 Master List is one of the world's best watchlists including

  • every dividend aristocrat (S&P companies with 25+ year dividend growth streaks)
  • every dividend champion (every company, including foreign, with 25+ year dividend growth streaks)
  • every dividend king (every company with 50+ year dividend growth streaks)
  • every foreign aristocrat (every company with 20+ year dividend growth streaks)
  • every Ultra SWAN (wide moat aristocrats, as close to perfect quality companies as exist)
  • 40 of the world's best growth stocks

Let me show you the screen I used to find higher-yielding and far superior alternatives to AT&T.

  1. yield of 5.5+% (vs 5.4% AT&T): 33 companies remain
  2. 8.9+% long-term consensus return potential (vs 8.8% AT&T): 30 companies remain
  3. investment-grade credit ratings: 23 companies remain
  4. good buys or better (margin of safety is sufficient to compensate for each company's risk profile): 15 companies remain
  5. safety score 81+ (very safe dividends): 0.5% historically average recession cut risk and 1% to 2% risk in a severe recession: 11 companies remain
  6. 80+ quality score (Super SWAN quality or better): 11 companies remain

Total time: 2 minutes

11 Higher-Yielding And Far Superior Alternatives To AT&T

x

Dividend Kings Zen Research Terminal

I've linked to articles about each company's investment thesis, long-term growth prospects, risk profile, valuation, and total return potential.

Note that LGGNY is the ADR version and LGEN is the London Stock Exchange version. The ADR fees on LGGNY amount to about 5% of the dividend, so if your broker allows it, buy LGEN to avoid the ADR fee.

ENB, MFC, and PBA, have 15% dividend tax withholdings.

  • not in retirement accounts
  • in taxable accounts, you get a tax credit to recoup the withholding

ALIZY has a 26.375% dividend withholding.

  • a tax credit is only available in taxable accounts
  • optically own non-Canadian foreign dividend stocks (except the UK which have no withholding) in taxable accounts

FAST Graphs Up Front

Magellan Midstream Partners 2024 Consensus Total Return Potential

x

(Source: FAST Graphs, FactSet Research)

Altria 2024 Consensus Total Return Potential

x

(Source: FAST Graphs, FactSet Research)

Legal & General 2024 Consensus Total Return Potential

x

(Source: FAST Graphs, FactSet Research)

Enterprise Products Partners 2024 Consensus Total Return Potential

x

(Source: FAST Graphs, FactSet Research)

British American Tobacco 2024 Consensus Total Return Potential

x

(Source: FAST Graphs, FactSet Research)

ONEOK 2024 Consensus Total Return Potential

x

(Source: FAST Graphs, FactSet Research)

Allianz 2024 Consensus Total Return Potential

x

(Source: FAST Graphs, FactSet Research)

Enbridge 2024 Consensus Total Return Potential

x

(Source: FAST Graphs, FactSet Research)

Manulife Financial 2024 Consensus Total Return Potential

x

(Source: FAST Graphs, FactSet Research)

Pembina Pipeline 2024 Consensus Total Return Potential

x

(Source: FAST Graphs, FactSet Research)

Bank of Nova Scotia 2024 Consensus Total Return Potential

x

(Source: FAST Graphs, FactSet Research)

  • average 2024 consensus return potential: 21.% CAGR
  • literally, Buffett-like short-term return potential from 11 high-yield blue-chip bargains hiding in plain sight.

S&P 500 2024 Consensus Total Return Potential

x

(Source: FAST Graphs, FactSet Research)

Analysts expect about 12.5% annual returns from the S&P over the next 2.5 years, nearly 50% less than what these high-yield blue-chips potentially offer.

They also offer about 4% higher return potential through 2024 than AT&T, though with a far better track record of actually delivering market-crushing returns and dependable income growth.

OK, so now let me show you why these are such better alternatives to AT&T.

Some Of The World's Highest Quality And Most Dependable High-Yield Blue-Chips

x

Dividend Kings Zen Research Terminal

These aren't just 7% yielding blue-chips, but 7% yielding Ultra SWANs (sleep well at night), as close to perfect quality dividend growth stocks as can exist on Wall Street.

How do I know? Because they are higher quality than the dividend aristocrats.

Higher Quality Than Dividend Aristocrats And Much Higher Quality Than AT&T

Metric Dividend Aristocrats 11 High-Yield AT&T Alternatives AT&T Winner Aristocrats Winner 11 High-Yield AT&T Alternatives Winner AT&T
Quality 87% 88% 57% 1
Safety 89% 90% 56% 1
Dependability 84% 88% 55% 1
Long-Term Risk Management Industry Percentile 67% Above-Average 73% Good 75% Good 1
Average Credit Rating A- Stable BBB+ Stable BBB Stable 1
Average 30-Year Bankruptcy Risk 3.01% 4.09% 7.50% 1
Average Dividend Growth Streak (Years) 44.3 15.3 0 1
Average Return On Capital 100% 478% 20% 1
Average ROC Industry Percentile 83% 87% 60% 1
13-Year Median ROC 89% 296% 19% 1
Forward PE 18.8 8.4 8.1 1
Discount To Fair Value 8.0% 26.0% 18.0% 1
DK Rating Good Buy Very Strong Buy Reasonable Buy 1
Yield 2.6% 7.0% 5.4% 1
LT Growth Consensus 8.6% 6.6% 3.4% 1
Total Return Potential 11.2% 13.6% 8.8% 1
Risk-Adjusted Expected Return 7.6% 9.1% 5.7% 1
Inflation & Risk-Adjusted Expected Return 5.1% 6.7% 3.2% 1
Years To Double 14.0 10.8 22.3 1
Total 4 13 2

(Source: Dividend Kings Zen Research Terminal)

These aren't just safe 7% yielding blue-chips, they are some of the safest 7% yielding companies on earth. How safe?

Rating Dividend Kings Safety Score (162 Point Safety Model) Approximate Dividend Cut Risk (Average Recession) Approximate Dividend Cut Risk In Pandemic Level Recession
1 - unsafe 0% to 20% over 4% 16+%
2- below average 21% to 40% over 2% 8% to 16%
3 - average 41% to 60% 2% 4% to 8%
4 - safe 61% to 80% 1% 2% to 4%
5- very safe 81% to 100% 0.5% 1% to 2%
11 Higher-Yielding AT&T Alternatives 90% 0.5% 1.5%
Risk Rating Low-Risk (73rd industry percentile risk-management consensus) BBB+ stable outlook credit rating 4.1% 30-year bankruptcy risk 20% OR LESS Max Risk Cap Recommendation (Each)

(Source: Dividend Kings Zen Research Terminal)

In the average recession since WWII, the approximate risk of these high-yield blue-chips cutting their dividend is 1 in 200. In a severe Great Recession or Pandemic level downturn, it's approximately 1 in 67.

Their average dividend growth streak is 15 years. How significant is that?

x

Justin Law

During the pandemic, companies with 12+ year dividend growth streaks were significantly less likely to cut their dividends.

  • all of these companies have a progressive dividend policy
  • dividends are never cut unless absolutely necessary
  • and grow in-line with earnings over time

Joel Greenblatt considered return on capital his gold standard proxy for quality and moatiness.

  • annual pre-tax income/the cost of running the business

One of the greatest investors in history, 40% annual returns for 21 years, used valuation and ROC as his core investing strategy.

For context, the S&P 500 has 14.6% return on capital and AT&T 20%.

The dividend aristocrats have 100% ROC and these high-yield Ultra SWANs a spectacular 478%.

Their 13-year median ROC is 296% vs the aristocrats' 89% and AT&T's 19%.

Their ROC is in the 87th industry percentile vs the aristocrats' 80% and AT&T's 60%.

What does this mean? Some of the world's highest quality, most profitable, and widest moat companies.

S&P estimates their average 30-year bankruptcy risk (Buffett's definition of fundamental risk) is 4.1%, a BBB+ stable credit rating vs the aristocrats' A- stable and AT&T's BBB stable.

And six rating agencies estimate their long-term risk management is in the 73rd industry percentile vs 75% for AT&T and 67% for the dividend aristocrats.

Classification Average Consensus LT Risk-Management Industry Percentile

Risk-Management Rating

S&P Global (SPGI) #1 Risk Management In The Master List 94 Exceptional
Strong ESG List 78

Good - Bordering On Very Good

Foreign Dividend Stocks 75 Good
AT&T 75 Good
11 Higher-Yielding AT&T Alternatives 73 Good
Ultra SWANs 71 Good
Low Volatility Stocks 68 Above-Average
Dividend Aristocrats 67 Above-Average
Dividend Kings 63 Above-Average
Master List average 62 Above-Average
Hyper-Growth stocks 61 Above-Average
Monthly Dividend Stocks 60 Above-Average
Dividend Champions 57 Average

(Source: DK Research Terminal)

OK, so now that you understand just why these 11 higher-yielding and much higher quality companies are so much better than AT&T, here's why you might want to buy them today.

Wonderful Companies At Wonderful Prices

x

Dividend Kings Zen Research Terminal

AT&T trades at 8.1X forward earnings, an anti-bubble valuation, that Morningstar estimates is an 18% discount to its fair value of $25.

The S&P trades at 16.0X forward earnings, a 4% historical discount to its 10, 25, and 45-year average forward PE.

The dividend aristocrats trade at 18.8X forward earnings, an 8% historical discount.

These high-yield blue-chips trade at 8.4X earnings, a 26% historical discount.

That's why analysts expect 32% total returns in the next 12 months, but 44% total returns are fundamentally justified by their fundamentals.

If these companies all grow as expected and return to their historical fair value within 12 months, then investors will make 44% returns in a year.

What about the aristocrats?

  • average 12-month median analyst forecast: 22.4%
  • fundamentally justified 12-month total return: 14.9%

But my goal isn't to help you earn 32% or even 44% in 12 months, though these high-yield blue-chips are fundamentally capable of that.

My goal is to help you retire in safety and splendor by earning potentially 45X returns over decades.

Long-Term Return Potential That Puts AT&T To Shame And Can Help You Retire In Safety And Splendor

x

Dividend Kings Zen Research Terminal

Not only do these 11 blue-chips yield 7%, 33% more than AT&T, but analysts expect them to grow 6.6%, almost 2X as fast as AT&T.

That means 13.6% consensus return potential and 6.7% risk and inflation-adjusted expected returns. What are real expected returns?

  • analyst consensus adjusted for the probability of companies not growing as expected
  • not returning to fair value
  • going bankrupt
  • the bond market's 30-year inflation forecast

In other words, it's a reasonable estimate of what you can expect to make.

Dividend 72% by the real expected return and you get how long it's likely to take for you to double your inflation-adjusted savings.

  • S&P 500's doubling time is 15.3 years
  • aristocrats 14.0 years
  • AT&T's 22.3 years
  • these 11 high-yield blue-chips 11.2 years

Think that doubling your money 3 or 4 years faster than the aristocrats or S&P 500 doesn't matter? Well just take a look at what kind of life-changing difference in wealth it could mean for you.

Inflation-Adjusted Consensus Total Return Potential: $510,000 Average Retired Couple's Savings Initial Investment

Time Frame (Years) 7.7% CAGR Inflation-Adjusted S&P Consensus 8.7% Inflation-Adjusted Aristocrats Consensus 11.1% CAGR Inflation-Adjusted 11 Higher-Yielding AT&T Alternatives Consensus Difference Between Inflation-Adjusted 11 Higher-Yielding AT&T Alternatives Consensus Vs S&P Consensus
5 $740,037.07 $775,027.51 $864,423.86 $124,386.79
10 $1,073,833.07 $1,177,779.68 $1,465,154.15 $391,321.08
15 $1,558,188.78 $1,789,826.76 $2,483,361.20 $925,172.42
20 $2,261,014.63 $2,719,931.31 $4,209,169.97 $1,948,155.33
25 $3,280,852.25 $4,133,375.65 $7,134,327.39 $3,853,475.14
30 $4,760,690.75 $6,281,332.99 $12,092,319.31 $7,331,628.55

(Source: DK Research Terminal, FactSet)

For the average retired couple, it means potentially $7.3 million in inflation-adjusted wealth over a 30-year retirement.

Time Frame (Years) Ratio Aristocrats/S&P Consensus Ratio Inflation-Adjusted 11 Higher-Yielding AT&T Alternatives Consensus vs S&P consensus
5 1.05 1.17
10 1.10 1.36
15 1.15 1.59
20 1.20 1.86
25 1.26 2.17
30 1.32 2.54

(Source: DK Research Terminal, FactSet)

That's potentially 2.5X more than the S&P 500 and 2X better than analysts expect from the dividend aristocrats.

Do you see how the right high-yield blue-chips can help you retire in safety and splendor?

OK, but that assumes these companies deliver almost 14% long-term returns for decades. What evidence is there that they can actually do that?

Historical Returns Since November 2003 (Equal Weighting, Annual Rebalancing)

"The future doesn't repeat, but it often rhymes." - Mark Twain

Past performance is no certain of future results, but studies show that blue-chips with relatively stable fundamentals over time offer predictable returns based on yield, growth, and valuation mean reversion.

valuation is axlmost allx that matters for long-term stock returns

Bank of America

So let's see how these 11 higher-yielding AT&T alternatives performed over the last two decades when 91% of their returns were the result of fundamentals, not luck.

x

(Source: Portfolio Visualizer Premium)

Analysts expect 13.6% long-term returns and they delivered...13.4% CAGR. That's more than 2X the annual return of AT&T and almost 4% higher than the S&P 500.

And they did it with slightly lower volatility than AT&T and 2X higher negative-volatility-adjusted total returns (Sortino ratio).

  • 32% higher negative-volatility adjusted annual returns than the S&P 500
x

(Source: Portfolio Visualizer Premium)

Analysts expect about 4X inflation-adjusted returns from the S&P in the next 20 years. Over the last 11 years, the market delivered 3.3X returns.

Analysts expect AT&T to double your money roughly every 22 years, and in the last 19 years, it delivered exactly 2X inflation-adjusted returns.

Analysts expect these 11 high-yield blue-chips to potentially deliver about 8.3X inflation-adjusted returns. Over the last 20? 6.6X and that's factoring in their current 11% bear market.

  • without the current bear market, they would have delivered 7.5X inflation-adjusted returns.
  • within 10% of what the Gordon Dividend growth model predicted
  • over 19 years
  • the most accurate long-term forecasting model ever devised
  • which is used by almost every asset manager
  • BlackRock, Vanguard, Oaktree, Brookfield, Fidelity, Schwab, etc.
x

(Source: Portfolio Visualizer Premium)

Their average rolling returns were 12% to 15%, 2X more than AT&T's.

Their worst 15-year returns?

  • 3.82X return for these 11 high-yield blue-chips
  • 1.4X return for AT&T
  • 2.9X return for S&P 500
x

(Source: Portfolio Visualizer Premium)

In 2022, when the market is down almost 20%? These 11 high-yield blue-chips are up 4%. Does that mean these blue-chips are bear market-proof?

No company is bear market proof, as you can see from how poorly these companies did in the Pandemic.

x

(Source: Portfolio Visualizer Premium)

  • which is largely why they are still such attractive bargains today
  • and yield one of the safest 7% yields in the world

But does that mean these aren't defensive blue-chips? Not at all.

x

(Source: Portfolio Visualizer Premium)

x

(Source: Portfolio Visualizer Premium)

x

(Source: Portfolio Visualizer Premium)

These high-yield blue-chips are currently in an 11% bear market vs 33% for AT&T and 20% for the S&P.

The longest they've ever taken to recover record highs after a bear market is 2.5 years, vs 5 years for the S&P 500 and 11.5 years for AT&T.

So higher and much safer yield, stronger returns, smaller declines (usually), and faster bear market recoveries.

And let's not forget the most important part about high-yield investing, long-term income growth!

High-Yield Dividend Growth Blue-Chips You Can Trust

x

(Source: Portfolio Visualizer Premium) 2008 was MO's PM spin-off

If your goal is maximum safe income why would you choose AT&T over these 11 high-yield blue-chip alternatives?

Portfolio 2004 Income Per $1,000 Investment 2021 Income Per $1,000 Investment Annual Income Growth Starting Yield

2021 Yield On Cost

S&P 500 $21 $77 7.94% 2.1% 7.7%
AT&T $53 $222 8.79% 5.3% 22.2%
11 Higher-Yielding AT&T Alternatives $83 $654 12.91% 8.3% 65.4%

(Source: Portfolio Visualizer Premium)

They delivered almost 2X the annual income growth of the S&P and AT&T and turned an 8.3% starting yield into a yield on cost of 65% over the last 17 years.

What about future income growth?

Analyst Consensus Income Growth Forecast Risk-Adjusted Expected Income Growth Risk And Tax-Adjusted Expected Income Growth

Risk, Inflation, And Tax Adjusted Income Growth Consensus

13.1% 9.2% 7.8% 5.3%

(Source: DK Research Terminal, FactSet)

Analysts expect 13% income growth from these blue-chips in the future, just as they've delivered for almost two decades. When adjusted for the risk of it not growing as expected, inflation and taxes is about 5.3% real expected income growth.

Now compare that to what they expect from the S&P 500.

Time Frame S&P Inflation-Adjusted Dividend Growth S&P Inflation-Adjusted Earnings Growth
1871-2021 1.6% 2.1%
1945-2021 2.4% 3.5%
1981-2021 (Modern Falling Rate Era) 2.8% 3.8%
2008-2021 (Modern Low Rate Era) 3.5% 6.2%
FactSet Future Consensus 2.0% 5.2%

(Sources: S&P, FactSet, Multipl.com)

  • 1.7% tax and inflation-adjusted S&P consensus income growth

What about a 60/40 retirement portfolio?

  • 0.5% consensus inflation, risk, and tax-adjusted income growth.

In other words, these 11 higher-yielding superior AT&T alternatives offer

  • almost 4X the market's yield (and a much safer yield at that)
  • 1.33X AT&T's yield (and a much, much safer yield at that)
  • about 3X the S&P's long-term inflation-adjusted consensus income growth potential
  • 11X better long-term inflation-adjusted income growth than a 60/40 retirement portfolio

This is the power of high-yield blue-chip investing done right.

Bottom Line: Don't Gamble On AT&T's Turnaround Story When You Can Buy These Higher-Yielding, Far Superior Alternatives Instead

Let me be very clear, AT&T is not a dangerous company that's likely going to zero. Rating agencies estimate a 92.5% probability AT&T will survive the next three decades.

But what I am saying is that after a careful examination of its fundamentals, I can think of just one group of investors who should own AT&T right now. Index fund investors who own it as part of an ETF or mutual fund.

We all have limited funds, and for new money today there are almost no reasons to buy AT&T over these 11 higher-yielding, much higher quality, much faster growing, and much safer Ultra SWANs.

The Evidence Is Clear: These Are 11 Much Better Alternatives To AT&T

Metric Dividend Aristocrats 11 High-Yield AT&T Alternatives AT&T Winner Aristocrats Winner 11 High-Yield AT&T Alternatives Winner AT&T
Quality 87% 88% 57% 1
Safety 89% 90% 56% 1
Dependability 84% 88% 55% 1
Long-Term Risk Management Industry Percentile 67% Above-Average 73% Good 75% Good 1
Average Credit Rating A- Stable BBB+ Stable BBB Stable 1
Average 30-Year Bankruptcy Risk 3.01% 4.09% 7.50% 1
Average Dividend Growth Streak (Years) 44.3 15.3 0 1
Average Return On Capital 100% 478% 20% 1
Average ROC Industry Percentile 83% 87% 60% 1
13-Year Median ROC 89% 296% 19% 1
Forward PE 18.8 8.4 8.1 1
Discount To Fair Value 8.0% 26.0% 18.0% 1
DK Rating Good Buy Very Strong Buy Reasonable Buy 1
Yield 2.6% 7.0% 5.4% 1
LT Growth Consensus 8.6% 6.6% 3.4% 1
Total Return Potential 11.2% 13.6% 8.8% 1
Risk-Adjusted Expected Return 7.6% 9.1% 5.7% 1
Inflation & Risk-Adjusted Expected Return 5.1% 6.7% 3.2% 1
Years To Double 14.02 10.80 22.30 1
Total 4 13 2

(Source: DK Zen Research Terminal)

Don't get me wrong, I'm not saying that you have to buy all of these companies.

This article is about providing 11 higher-yielding and far superior quality alternatives to AT&T and that's exactly what MMP, MO, LGGNY, EPD, BTI, OKE, ALIZY, ENB, MFC, PBA, and BNS represent.

Some investors absolutely detest K1 tax forms, and if that describes you then ignore MMP and EPD.

Some investors just can't stand dividend tax withholdings and extra complexity at tax time, and if that's the case then ignore PBA, BNS, and ENB.

Some investors avoid tobacco for personal ethical reasons, and in that case MO and BTI are not for you.

The point is that any one of these high-yield blue-chips is a superior alternative to AT&T.

  • higher yield
  • faster growth
  • a safer dividend
  • faster growing dividends
  • credit ratings as good or better (in some cases much better)
  • much higher quality and dependability
  • higher long-term return potential
  • superior long-term returns

When you have limited capital you need to be reasonable and prudent with where you invest it.

Can AT&T make a good investment from here? That depends on whether the turnaround succeeds and the company delivers on its expected growth.

  • 8.8% long-term consensus return potential is in-line with its historical returns

Could AT&T make a potentially fantastic short-term investment? Sure, because a return to fair value could mean 20% annual returns for the next 2.5 years.

  • 24% from these higher-yielding alternatives

But whether you are shooting for huge short-term upside or life-changing long-term wealth and income compounding by earning thousands of percent over decades, one thing is clear.

These 11 higher-yielding blue-chips are far superior alternatives to AT&T today.

Thu, 14 Jul 2022 02:01:00 -0500 en text/html https://seekingalpha.com/article/4523270-11-better-blue-chip-alternatives-to-att
Killexams : International Business Machines (NYSE:IBM) Given New $156.00 Price Target at Credit Suisse Group

International Business Machines (NYSE:IBMGet Rating) had its price objective trimmed by Credit Suisse Group from $166.00 to $156.00 in a research report report published on Wednesday, The Fly reports. They currently have an outperform rating on the technology company’s stock.

IBM has been the subject of a number of other reports. Morgan Stanley reduced their target price on shares of International Business Machines from $157.00 to $155.00 and set an overweight rating on the stock in a research report on Tuesday, July 19th. BMO Capital Markets reduced their target price on shares of International Business Machines from $152.00 to $148.00 in a research report on Tuesday, July 19th. Tigress Financial upped their target price on shares of International Business Machines from $133.00 to $139.00 and gave the stock a neutral rating in a research report on Thursday, April 21st. StockNews.com lowered shares of International Business Machines from a buy rating to a hold rating in a report on Wednesday, July 13th. Finally, Bank of America increased their price objective on shares of International Business Machines from $162.00 to $165.00 and gave the company a buy rating in a report on Wednesday, April 20th. One analyst has rated the stock with a sell rating, three have issued a hold rating and seven have given a buy rating to the stock. Based on data from MarketBeat, International Business Machines presently has a consensus rating of Moderate Buy and an average target price of $146.10.

International Business Machines Stock Performance

NYSE IBM opened at $128.25 on Wednesday. The stock has a market cap of $115.35 billion, a P/E ratio of 20.82, a PEG ratio of 1.90 and a beta of 0.93. International Business Machines has a twelve month low of $114.56 and a twelve month high of $146.00. The company has a quick ratio of 0.87, a current ratio of 0.88 and a debt-to-equity ratio of 2.28. The company’s 50-day simple moving average is $137.29 and its 200 day simple moving average is $133.00.

International Business Machines (NYSE:IBMGet Rating) last released its quarterly earnings results on Monday, July 18th. The technology company reported $2.31 EPS for the quarter, beating analysts’ consensus estimates of $2.29 by $0.02. The firm had revenue of $15.54 billion for the quarter, compared to analyst estimates of $15.18 billion. International Business Machines had a net margin of 8.72% and a return on equity of 43.52%. The company’s revenue for the quarter was up 9.3% compared to the same quarter last year. During the same period in the previous year, the business earned $2.33 earnings per share. As a group, research analysts forecast that International Business Machines will post 9.6 earnings per share for the current fiscal year.

International Business Machines Increases Dividend

The company also recently announced a quarterly dividend, which was paid on Friday, June 10th. Shareholders of record on Tuesday, May 10th were paid a $1.65 dividend. This represents a $6.60 annualized dividend and a yield of 5.15%. The ex-dividend date of this dividend was Monday, May 9th. This is an increase from International Business Machines’s previous quarterly dividend of $1.64. International Business Machines’s dividend payout ratio is presently 107.14%.

Insider Buying and Selling at International Business Machines

In other news, major shareholder Business Machine International sold 22,301,536 shares of the stock in a transaction on Thursday, May 19th. The shares were sold at an average price of $13.95, for a total transaction of $311,106,427.20. Following the completion of the sale, the insider now owns 22,301,536 shares of the company’s stock, valued at $311,106,427.20. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Insiders own 0.04% of the company’s stock.

Institutional Inflows and Outflows

A number of hedge funds have recently added to or reduced their stakes in IBM. BCR Wealth Strategies LLC acquired a new stake in shares of International Business Machines in the second quarter valued at about $25,000. IFS Advisors LLC bought a new stake in International Business Machines during the fourth quarter worth about $28,000. Gleason Group Inc. bought a new stake in International Business Machines during the second quarter worth about $28,000. Parkside Investments LLC bought a new stake in International Business Machines during the first quarter worth about $31,000. Finally, Canton Hathaway LLC bought a new stake in International Business Machines during the second quarter worth about $31,000. Institutional investors own 55.22% of the company’s stock.

About International Business Machines

(Get Rating)

International Business Machines Corporation provides integrated solutions and services worldwide. The company operates through four business segments: Software, Consulting, Infrastructure, and Financing. The Software segment offers hybrid cloud platform and software solutions, such as Red Hat, an enterprise open-source solutions; software for business automation, AIOps and management, integration, and application servers; data and artificial intelligence solutions; and security software and services for threat, data, and identity.

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Analyst Recommendations for International Business Machines (NYSE:IBM)

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Sat, 23 Jul 2022 19:09:00 -0500 MarketBeat News en text/html https://www.etfdailynews.com/2022/07/24/international-business-machines-nyseibm-given-new-156-00-price-target-at-credit-suisse-group/
Killexams : Q2 Earnings Surprise in Cards for IBM: ETFs in Focus

International Business Machines IBM is scheduled to report second-quarter 2022 results on Jul 18 after market close. Being the world’s largest computer-services provider, it is worth taking a look at its fundamentals ahead of results.

IBM has gained 10.2% over the past three months outperforming the industry, which has declined 2.4%. The positive trend is expected to continue as IBM saw increasing earnings estimates for the yet-to-be-reported quarter right before the earnings announcement (see: all the Technology ETFs here).

Given this, ETFs having the highest allocation to this this tech giant will be in focus. These funds — First Trust NASDAQ Technology Dividend Index Fund TDIV, Invesco Dow Jones Industrial Average Dividend ETF DJD, WBI Power Factor High Dividend ETF WBIY, Amplify Transformational Data Sharing ETF BLOK, and SPDR NYSE Technology ETF XNTK — could be potential movers if IBM surprises the market.

Inside Our Methodology

IBM has a Zacks Rank #3 (Hold) and an Earnings ESP of +0.22%. According to our methodology, the combination of a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The stock has seen positive earnings estimate revision of a penny for the second quarter over the last seven days. Analysts increasing estimates right before earnings — with the most up-to-date information possible — is a good indicator for the stock. Its earnings track is also impressive, with the average four-quarter positive earnings surprise being 2.02%. However, the Zacks Consensus Estimate indicates a substantial earnings decline of 1.3% from the year-ago quarter and a revenue decline of 19.3%. The stock has a VGM Score of B and belongs to a bottom-ranked Zacks industry (bottom 24%).

The Zacks Consensus Estimate for the average target price is $148.30, with 50% of the analysts having a Strong Buy or a Buy rating ahead of earnings.

ETFs in Focus

First Trust NASDAQ Technology Dividend Index Fund (TDIV)

First Trust NASDAQ Technology Dividend Index Fund provides exposure to dividend payers within the technology sector by tracking the Nasdaq Technology Dividend Index. It charges 50 bps in annual fees and holds about 91 securities in its basket. Of these firms, IBM takes the top spot, making up 8.8% of the assets (read: Market-Beating Dividend ETFs of 1H).

First Trust NASDAQ Technology Dividend Index Fund has amassed $1.6 billion in its asset base while trading in a volume of around 160,000 shares per day.

Invesco Dow Jones Industrial Average Dividend ETF (DJD)

Invesco Dow Jones Industrial Average Dividend ETF offers exposure to dividend-paying companies included in the Dow Jones Industrial Average by their 12-month dividend yield over the prior 12 months. It holds 28 stocks in its basket, with IBM occupying the top position accounting for 8.9%.

Invesco Dow Jones Industrial Average Dividend ETF has managed assets worth $222.9 million while trading in a volume of 58,000 shares a day on average. It charges 7 bps in annual fees and has a Zacks ETF Rank #3 (Hold).

WBI Power Factor High Dividend ETF (WBIY)

WBI Power Factor High Dividend ETF offers exposure to quality stocks that have the highest dividend yield with a deep value bias and multi-factor fundamental analysis. It follows the Solactive Power Factor High Dividend Index, holding 51 stocks in the basket. IBM takes the top position with a 6.4% share in the basket.

WBI Power Factor High Dividend ETF has amassed $62.4 million in its asset base and charges 70 bps in annual fees. It trades in a lower volume of 6,000 shares a day, on average.

Amplify Transformational Data Sharing ETF (BLOK)

Amplify Transformational Data Sharing ETF is actively managed, providing investors global exposure to a basket of the leading companies engaged in the development and utilization of blockchain technologies. It holds a basket of 49 stocks, with IBM taking the top spot at 5.5% of the portfolio. American firms dominate about 77% of the portfolio, followed by Asia Pacific (16.7%).

Amplify Transformational Data Sharing ETF has AUM of $521.8 million in its asset base and trades in an average daily volume of 367,000 shares. BLOK has an expense ratio of 0.71%.

SPDR NYSE Technology ETF (XNTK)

SPDR NYSE Technology ETF provides exposure to 35 leading U.S.-listed technology-related companies by tracking the NYSE Technology Index. IBM occupies the top spot with 5.1% of assets. Semiconductors take the largest share at 25.6%, while Internet & direct marketing retail, systems software and semiconductor equipment round off the next spots (read: Cathie Wood Sees a Fast Recovery in Tech ETFs: Is It Possible?).

SPDR NYSE Technology ETF has amassed $385.8 million and charges 35 bps in annual fees. It trades in an average daily volume of 16,000 shares and has a Zacks ETF Rank #2 (Buy).


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International Business Machines Corporation (IBM) : Free Stock Analysis Report
 
Invesco Dow Jones Industrial Average Dividend ETF (DJD): ETF Research Reports
 
First Trust NASDAQ Technology Dividend ETF (TDIV): ETF Research Reports
 
WBI Power Factor High Dividend ETF (WBIY): ETF Research Reports
 
SPDR NYSE Technology ETF (XNTK): ETF Research Reports
 
Amplify Transformational Data Sharing ETF (BLOK): ETF Research Reports
 
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Fri, 15 Jul 2022 05:12:00 -0500 en-GB text/html https://uk.news.yahoo.com/q2-earnings-surprise-cards-ibm-151503283.html
Killexams : Applied AI with DeepLearning No result found, try new keyword!Once enrolled you can access the license in the Resources area <<< This course, Applied Artificial Intelligence with DeepLearning, is part of the IBM Advanced ... about the fundamentals of Linear ... Sat, 12 Jun 2021 11:47:00 -0500 text/html https://www.usnews.com/education/skillbuilder/applied-ai-with-deeplearning-0_tE4j0qhMEeecqgpT6QjMdA Killexams : Texas Pacific and IBM have been highlighted as Zacks Bull and Bear of the Day

For Immediate Release

Chicago, IL – July 25, 2022 – Zacks Equity Research shares Texas Pacific Land TPL as the Bull of the Day and International Business Machines IBM as the Bear of the Day. In addition, Zacks Equity Research provides analysis on The Boeing Company BA, L3Harris Technologies LHX and Spire Global, Inc. SPIR.

Here is a synopsis of all five stocks:

Bull of the Day:

Texas Pacific Land is a Zacks Rank #1 (Strong Buy) that is landowners principally in the State of Texas. The Company generates revenue from pipeline, power line and utility easements, commercial leases, material sales and seismic and temporary permits related to land uses including midstream infrastructure projects and hydrocarbon processing facilities.

The stock took off in late 2020 and into 2021, moving from $400 to $1770. From there, the stock saw a slow descent, back under the $1000 level earlier this year.

But investors have been buying the stock since those bottoms in Q1. The stock is back at all time highs and should be watched for buying opportunities.

More About TPL

The company describes itself as a "Pure play in the Permian Basin." Texas Pacific Land was founded in 1888 and is headquartered in Dallas, Texas. It employs about 100 people and has a market cap of $13.5 billion.

TPL engages in the land and resource management, and water services and operations businesses.

The company's Land and Resource Management segment manages approximately 880,000 acres of land in 19 counties in the western part of Texas. It rents this land out to oil and gas producers that pay fees for use of that land.

Texas Pacific also has a Water Services and Operations segment that provides full-service water offerings.

The stock has a Zacks Style Score of "B" in Momentum and "C" in Growth. However, it has a "F" in Value, due to the high Forward PE of 28. While the PE is high, investors value the free cash flow more, which has been high due to higher energy prices.

Q1 Earnings

On May 4th, TPL reported an 8% EPS miss for Q1. While the company missed the estimates, the year over year numbers came in almost double from last year.

For earnings, the company saw $12.64 v the $6.45 last year. And for revenues, $147.M vs the $84.2M last year.

The company raised their dividend 9.1% and boosted their special dividend to $20 a share.

Here are some comments from management on the special dividend and the quarter:

"With tailwinds of favorable commodity prices, strong production, and a debt-free balance sheet, we're pleased to announce a $20 per share special dividend as our shareholders reap the windfall of supportive underlying fundamentals."

The company added that the dividend is on top of their $100 million share repurchase program and they will continue to return capital back to shareholders.

Estimates Rising

Analysts are getting excited about the upcoming quarters and raising estimates across all time frames.

Over the last month, estimates for the current quarter have gone from $15.10 to $15.84, a move of 5%. For the current year, we have seen a move of 3.5% higher, with estimates moving from $60.73 to $62.91.

Next year's estimates are also moving higher. Over the last 60 days, estimates have gone from $67.26 to $70.60, or 5%.

Strength in a Weak Market

TPL has not only been a great place to hide, it has been very rewarding. The stock is up almost 50% so far in 2022 and over 120% since the beginning over 2020.

In addition to the appreciation, investors are being rewarded with a small annual dividend and of course, the large special dividend. Investors should expect more special dividends in the future, due to the free cash flow that is being generated from high energy prices.

The Technical Take

The stock is trading at all-time highs so instead of chasing it, investors might want to be patient and look for pullbacks.

The 21-day moving average is at $1600, while the 50-day is at $1550. The 200-day MA is all the way down at $1330 and not likely to hit anytime soon.

Looking at the Fibonacci levels, the pullback earlier this year came down into the 61.8% retracement at $930 and held. Investors looking for upside targets could target the -23.6% level at $2075.

In Summary

When markets are weak, investors should look for relative strength. Not only is TPL relatively strong, but the stock has taken off to all-time highs. This is a very positive sign for investors and when market sentiment improves, the stock could really get going.

Investors should watch energy prices when owning a name like this. A large drop in oil and natural gas could destroy the narrative.

Bear of the Day:

International Business Machines is a Zacks Rank #5 (Strong Sell) provides advanced information technology solutions, computer systems, quantum computing and super computing solutions, enterprise software, storage systems and microelectronics.

"Big Blue" has struggled over the last decade, so they have tried to adjust and pivot to the cloud. Their acquisition of Red Hat helped this idea, but a exact earnings report has disappointed investors.

The stock is now trending lower and looks like it might challenge 2022 lows.

About the Company

IBM is headquartered in Armonk, New York. The company was incorporated in 1911 and employs over 280,000 people.

The company operates through four business segments: Software, Consulting, Infrastructure, and Financing.

IBM is valued at $114 billion and has a Forward PE of 13. The stock holds a Zacks Style Score of "C" in Value, "B" in Growth and "B" in Momentum. The stock pays a dividend of 5%.

Q2 Earnings

The company reported EPS last week, seeing Q2 at $2.31 versus the $2.29 expected. Revenues came in at $15.5B versus $15.1B. IBM affirmed FY22 at the high end of its mid-single digit model, but narrowed the FY22 FCF to $10B from $10-10.5B.

Margins were down year over year, from 55.2% to 53.4%. While software, consulting and infrastructure revenues were all higher year over year.

Here are some comments from CEO Arvind Krishna:

"In the quarter we delivered good revenue performance with balanced growth across our geographies, driven by client demand for our hybrid cloud and AI offerings. The IBM team executed our strategy well."

Estimates

Analysts are already starting to drop estimates as a result of the earnings report.

After stabilizing over the last few months, estimates have fallen off a cliff over the last 7 days. For the current quarter, estimates have fallen from $2.57 to 2.07, or 20%.

Things look to Improve next quarter, but we see estimates tracking lower again for next year. Over the last 60 days, numbers have been lowered from $10.81 to $10.26, or 5%.

Technical Take

The stock was holding up well before earnings, as it was seeing support at the 50-day moving average. But IBM is now trading under all its moving averages after the earnings report, slicing right through the 200-day at $130.50.

The lows of the year are just under $120. These should be taken out if the momentum continues and the bears could possibly target the 2021 lows around $113.

Looking at Fibonacci levels, a 61.8% retracement drawn from May lows to June highs was holding at $133. However, this support was broken and bears should target the 161.8% extension at $113. This lines up with that 2021 low support.

In Summary

While big blue had some positive aspects to the quarter, investors were disappointed overall. The stock fell over 8% after earnings and looks like it could take out 2022 lows on any market weakness.

The stock pays a nice dividend, but with cash flow being taken down, investors might start to lose faith in that payout.

Additional content:

Will Abnormal Costs Hurt Boeing (BA) on Q2 Earnings?

Increased 737 delivery figures are expected to have boosted The Boeing Company's commercial business in the second quarter. However, second-quarter 2022 results, scheduled for release on Jul 27, are projected to reflect the impacts of abnormal costs related to the 777-9 program, on the bottom-line front.

Click here to know how the company's overall Q2 performance is expected to have been.

Solid 737 Max Deliveries to Boost Growth

Thanks to steadily recovering air traffic, improved delivery figures for Boeing's 737 jets, a trend we have been witnessing in the past couple of quarters, were observed in the second quarter of 2022 as well. Notably, the aerospace giant delivered 103 737 jets in the soon-to-be-reported quarter, reflecting quite a solid improvement of 106% from 50 units delivered in the year-ago quarter.

In fact, such significant delivery figures of 737 primarily drove a significant surge of 53.2% in the company's overall commercial deliveries. This, in turn, must have contributed to Boeing Commercial Airplane (BCA) business segment revenues in the soon-to-be-reported quarter.

The Boeing Company price-eps-surprise | The Boeing Company Quote

However, the aerospace giant was unable to deliver any of its 787 Dreamliner jets in the second quarter of 2022, owing to production quality issues related to the program. This might have partially impacted the top-line performance of the BCA segment.

Currently, the Zacks Consensus Estimate for Boeing's commercial business segment's revenues, pegged at $6,491 million, indicates a solid 7.9% improvement from the year-ago quarter's reported figure.

Earnings Expectation

On the cost front, delivery delays concerning the 787 performance issue are likely to have had an impact on BCA's operating profit, thereby hurting its quarterly earnings. Also, the production pause for the 777-9 program is projected to result in approximately $1.5 billion of abnormal costs beginning in the second quarter, which in turn must have weighed on this unit's bottom line.

However, improvements in commercial airplanes' financial performance due to increasing 737 MAX deliveries and consistent efforts by the BCA team to manage costs through business transformation activities must have contributed to this unit's bottom-line growth in the first quarter.

Further, we expect to witness a steady improvement in the company's expenses in relation to the storage of the 737 aircraft as jets stored so long in the inventory are gradually getting delivered.

So, the effect of the aforementioned factors on the overall second-quarter earnings performance of the BCA segment seems to have been mixed.

Currently, the Zacks Consensus Estimate for Boeing's commercial business segment's bottom line, pegged at a loss of $158 million, indicates an improvement from the year-ago quarter's reported figure of a loss of $472 million.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Boeing this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.

Boeing has an Earnings ESP of -62.40% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Stocks to Consider

Here are a couple defense companies you may want to consider as these have the right combination of elements to post an earnings beat this season:

L3Harris Technologies: It is scheduled to release its second-quarter results on Jul 28. LHX holds a Zacks Rank #3 and has an Earnings ESP of +1.01%. You can see the complete list of today's Zacks #1 Rank stocks here.

LHX delivered a four-quarter average earnings surprise of 2.32%. The Zacks Consensus Estimate for L3Harris' second-quarter earnings, pegged at $3.16, has moved up 0.3% over the past seven days.

Spire Global, Inc. has an Earnings ESP of +9.43% and a Zacks Rank #3.

Spire delivered an earnings surprise of 7.7% in the last reported quarter. The Zacks Consensus Estimate for Spire's second-quarter sales is pegged at $18.93 billion.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Why Haven't You Looked at Zacks' Top Stocks?

Our 5 best-performing strategies have blown away the S&amp;P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.

See Stocks Free &gt;&gt;

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

https://www.zacks.com

Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.

Past performance is no certain of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&amp;P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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Mon, 25 Jul 2022 02:38:00 -0500 en-GB text/html https://uk.style.yahoo.com/texas-pacific-ibm-highlighted-zacks-093709774.html
Killexams : IBM RELEASES SECOND QUARTER RESULTS

Growth Across Key Segments Led by Hybrid Cloud Adoption; Solid Cash and Profit Generation

ARMONK, N.Y., July 18, 2022 /PRNewswire/ -- IBM (NYSE: IBM) today announced second-quarter 2022 earnings results.

IBM Corporation logo. (PRNewsfoto/IBM)

"In the quarter we delivered good revenue performance with balanced growth across our geographies, driven by client demand for our hybrid cloud and AI offerings. The IBM team executed our strategy well," said Arvind Krishna, IBM chairman and chief executive officer. "With our first half results, we continue to expect full-year revenue growth at the high end of our mid-single digit model."

Second-Quarter Highlights

  • Revenue
    - Revenue of $15.5 billion, up 9 percent, up 16 percent at constant currency (about 5 points from sales to Kyndryl)
    - Software revenue up 6 percent, up 12 percent at constant currency (about 7 points from sales to Kyndryl)
    - Consulting revenue up 10 percent, up 18 percent at constant currency
    - Infrastructure revenue up 19 percent, up 25 percent at constant currency (about 7 points from sales to Kyndryl)
    - Hybrid cloud revenue, over the last 12 months, of $21.7 billion, up 16 percent, up 19 percent at constant currency

  • Cash Flow
    - On a consolidated basis, year to date, net cash from operating activities of $4.6 billion; free cash flow of $3.3 billion

SECOND QUARTER 2022 INCOME STATEMENT SUMMARY

Pre-tax 

Gross

Pre-tax 

Income 

Net 

Diluted 

Revenue

Profit

Income

Margin

Income

EPS

GAAP from
Continuing
Operations

$

15.5B

$

8.3B

$

1.7B

11.1

%

$

1.5B

$

1.61

    Year/Year

9

%*

6

%

89

%

4.7

Pts

81

%

79

%

Operating
(Non-GAAP)

$

8.5B

$

2.5B

16.2

%

$

2.1B

$

2.31

    Year/Year

5

%

48

%

4.2

Pts

45

%

43

%

*16% at constant currency

"We are a faster-growing, focused, disciplined company with sound business fundamentals," said James Kavanaugh, IBM senior vice president and chief financial officer. "Our recurring revenue stream and solid cash generation position us well to continue to invest in R&amp;D, acquire new companies, and strengthen our talent in every part of the business, while also returning value to shareholders through our dividend."

Segment Results for Second Quarter

  • Software (includes Hybrid Platform &amp; Solutions, Transaction Processing)— revenues of $6.2 billion, up 6.4 percent, up 11.6 percent at constant currency (about 7 points from sales to Kyndryl):
    - Hybrid Platform &amp; Solutions up 4 percent, up 9 percent at constant currency (about 1.5 points from sales to Kyndryl):
       -- Red Hat up 12 percent, up 17 percent at constant currency
       -- Automation up 4 percent, up 8 percent at constant currency
       -- Data &amp; AI flat, up 4 percent at constant currency
       -- Security flat, up 5 percent at constant currency
    - Transaction Processing up 12 percent, up 19 percent at constant currency (about 22 points from sales to Kyndryl)
    - Software segment hybrid cloud revenue up 14 percent, up 18 percent at constant currency

  • Consulting (includes Business Transformation, Technology Consulting and Application Operations)— revenues of $4.8 billion, up 9.8 percent, up 17.8 percent at constant currency:
    - Business Transformation up 9 percent, up 16 percent at constant currency
    - Technology Consulting up 14 percent, up 23 percent at constant currency
    - Application Operations up 9 percent, up 17 percent at constant currency
    - Consulting segment hybrid cloud revenue up 20 percent, up 29 percent at constant currency

  • Infrastructure (includes Hybrid Infrastructure, Infrastructure Support)— revenues of $4.2 billion, up 19.0 percent, up 25.4 percent at constant currency (about 7 points from sales to Kyndryl):
    - Hybrid Infrastructure up 34 percent, up 41 percent at constant currency (about 7 points from sales to Kyndryl)
       -- IBM z Systems up 69 percent, up 77 percent at constant currency
       -- Distributed Infrastructure up 11 percent, up 17 percent at constant currency
    - Infrastructure Support down 2 percent, up 5 percent at constant currency (about 8 points from sales to Kyndryl)
    - Infrastructure segment hybrid cloud revenue up 24 percent, up 30 percent at constant currency

  • Financing (includes client and commercial financing)— revenues of $0.1 billion, down 29.9 percent, down 26.6 percent at constant currency

Cash Flow and Balance Sheet
On a consolidated basis, in the second quarter, the company generated net cash from operating activities of $1.3 billion or $2.6 billion excluding IBM Financing receivables. IBM's free cash flow was $2.1 billion. The company returned $1.5 billion to shareholders in dividends in the second quarter.

On a consolidated basis, for the first six months of the year, the company generated net cash from operating activities of $4.6 billion or $4.2 billion excluding IBM Financing receivables. IBM's free cash flow was $3.3 billion, which includes cash impacts from the company's structural actions initiated at the end of 2020.

IBM ended the second quarter with $7.8 billion of cash on hand (which includes marketable securities), up $0.2 billion from year-end 2021. Debt, including IBM Financing debt of $12.3 billion, totaled $50.3 billion, down $1.4 billion since the end of 2021.

Full-Year 2022 Expectations

  • Revenue growth: The company continues to expect constant currency revenue growth at the high end of its mid-single digit model. The company also expects an additional 3.5 point contribution from incremental sales to Kyndryl. At mid-July 2022 foreign exchange rates, currency is expected to be about a six-point headwind.

  • Free Cash Flow: The company now expects about $10 billion in consolidated 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. 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
On November 3, 2021, IBM completed the separation of Kyndryl. Unless otherwise specified, results are presented on a continuing operations basis. All references to revenue impacts from sales to Kyndryl are incremental sales post-separation.

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;

  • consolidated free cash flow;

  • consolidated cash from operating activities excluding IBM Financing receivables;

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.

Conference Call and Webcast
IBM's regular quarterly earnings conference call is scheduled to begin at 5:00 p.m. EDT, today. The Webcast may be accessed via a link at https://www.ibm.com/investor/events/earnings-2q22. 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

Six Months Ended

June 30, 

June 30, 

2022

2021*

2022

2021*

REVENUE

Software

$

6,166

$

5,795

$

11,938

$

10,933

Consulting

4,809

4,378

9,637

8,641

Infrastructure

4,235

3,560

7,453

6,853

Financing

146

209

300

417

Other

180

277

404

561

TOTAL REVENUE

15,535

14,218

29,732

27,405

GROSS PROFIT

8,290

7,852

15,625

14,879

GROSS PROFIT MARGIN

Software

79.2

%

79.7

%

79.0

%

78.8

%

Consulting

24.2

%

27.6

%

24.3

%

27.7

%

Infrastructure

53.8

%

57.1

%

52.4

%

56.7

%

Financing

35.3

%

29.9

%

36.5

%

32.7

%

TOTAL GROSS PROFIT MARGIN

53.4

%

55.2

%

52.6

%

54.3

%

EXPENSE AND OTHER INCOME

S,G&amp;A

4,855

4,849

9,452

9,536

R,D&amp;E

1,673

1,641

3,352

3,257

Intellectual property and custom development income

(176)

(133)

(297)

(278)

Other (income) and expense

(81)

302

166

647

Interest expense

297

281

607

561

TOTAL EXPENSE AND OTHER INCOME

6,568

6,940

13,280

13,724

INCOME/(LOSS) FROM CONTINUING OPERATIONS

BEFORE INCOME TAXES

1,722

912

2,345

1,155

Pre-tax margin

11.1

%

6.4

%

7.9

%

4.2

%

Provision for/(Benefit from) income taxes

257

101

218

(58)

Effective tax rate

14.9

%

11.1

%

9.3

%

(5.0)

%

INCOME FROM CONTINUING OPERATIONS

$

1,465

$

810

$

2,127

$

1,213

DISCONTINUED OPERATIONS

Income/(Loss) from discontinued operations, net of taxes

(73)

515

(2)

1,067

NET INCOME

$

1,392

$

1,325

$

2,125

$

2,280

EARNINGS/(LOSS) PER SHARE OF COMMON STOCK

Assuming Dilution

Continuing Operations

$

1.61

$

0.90

$

2.34

$

1.34

Discontinued Operations

$

(0.08)

$

0.57

$

0.00

$

1.18

TOTAL

$

1.53

$

1.47

$

2.34

$

2.52

Mon, 18 Jul 2022 08:16:00 -0500 en-US text/html https://finance.yahoo.com/news/ibm-releases-second-quarter-results-200800129.html
Killexams : IBM RELEASES SECOND QUARTER RESULTS

Growth Across Key Segments Led by Hybrid Cloud Adoption; Solid Cash and Profit Generation

ARMONK, N.Y., July 18, 2022 /PRNewswire/ -- IBM (NYSE: IBM) today announced second-quarter 2022 earnings results.

IBM Corporation logo. (PRNewsfoto/IBM)

"In the quarter we delivered good revenue performance with balanced growth across our geographies, driven by client demand for our hybrid cloud and AI offerings. The IBM team executed our strategy well," said Arvind Krishna, IBM chairman and chief executive officer. "With our first half results, we continue to expect full-year revenue growth at the high end of our mid-single digit model."

Second-Quarter Highlights

  • Revenue
    - Revenue of $15.5 billion, up 9 percent, up 16 percent at constant currency (about 5 points from sales to Kyndryl)
    - Software revenue up 6 percent, up 12 percent at constant currency (about 7 points from sales to Kyndryl)
    - Consulting revenue up 10 percent, up 18 percent at constant currency
    - Infrastructure revenue up 19 percent, up 25 percent at constant currency (about 7 points from sales to Kyndryl)
    - Hybrid cloud revenue, over the last 12 months, of $21.7 billion, up 16 percent, up 19 percent at constant currency
  • Cash Flow
    - On a consolidated basis, year to date, net cash from operating activities of $4.6 billion; free cash flow of $3.3 billion

SECOND QUARTER 2022 INCOME STATEMENT SUMMARY












Pre-tax














Gross



Pre-tax


Income



Net



Diluted





Revenue



Profit



Income


Margin



Income



EPS


GAAP from
Continuing
Operations


$

15.5B


$

8.3B


$

1.7B


11.1

%

$

1.5B


$

1.61


Year/Year



9

%*


6

%


89

%

4.7

Pts


81

%


79

%

Operating
(Non-GAAP)





$

8.5B


$

2.5B


16.2

%

$

2.1B


$

2.31


Year/Year






5

%


48

%

4.2

Pts


45

%


43

%

*16% at constant currency

"We are a faster-growing, focused, disciplined company with sound business fundamentals," said James Kavanaugh, IBM senior vice president and chief financial officer. "Our recurring revenue stream and solid cash generation position us well to continue to invest in R&amp;D, acquire new companies, and strengthen our talent in every part of the business, while also returning value to shareholders through our dividend."

Segment Results for Second Quarter

  • Software (includes Hybrid Platform &amp; Solutions, Transaction Processing)— revenues of $6.2 billion, up 6.4 percent, up 11.6 percent at constant currency (about 7 points from sales to Kyndryl):
    - Hybrid Platform &amp; Solutions up 4 percent, up 9 percent at constant currency (about 1.5 points from sales to Kyndryl):
    -- Red Hat up 12 percent, up 17 percent at constant currency
    -- Automation up 4 percent, up 8 percent at constant currency
    -- Data &amp; AI flat, up 4 percent at constant currency
    -- Security flat, up 5 percent at constant currency
    - Transaction Processing up 12 percent, up 19 percent at constant currency (about 22 points from sales to Kyndryl)
    - Software segment hybrid cloud revenue up 14 percent, up 18 percent at constant currency
  • Consulting (includes Business Transformation, Technology Consulting and Application Operations)— revenues of $4.8 billion, up 9.8 percent, up 17.8 percent at constant currency:
    - Business Transformation up 9 percent, up 16 percent at constant currency
    - Technology Consulting up 14 percent, up 23 percent at constant currency
    - Application Operations up 9 percent, up 17 percent at constant currency
    - Consulting segment hybrid cloud revenue up 20 percent, up 29 percent at constant currency
  • Infrastructure (includes Hybrid Infrastructure, Infrastructure Support)— revenues of $4.2 billion, up 19.0 percent, up 25.4 percent at constant currency (about 7 points from sales to Kyndryl):
    - Hybrid Infrastructure up 34 percent, up 41 percent at constant currency (about 7 points from sales to Kyndryl)
    -- IBM z Systems up 69 percent, up 77 percent at constant currency
    -- Distributed Infrastructure up 11 percent, up 17 percent at constant currency
    - Infrastructure Support down 2 percent, up 5 percent at constant currency (about 8 points from sales to Kyndryl)
    - Infrastructure segment hybrid cloud revenue up 24 percent, up 30 percent at constant currency
  • Financing (includes client and commercial financing)— revenues of $0.1 billion, down 29.9 percent, down 26.6 percent at constant currency

Cash Flow and Balance Sheet
On a consolidated basis, in the second quarter, the company generated net cash from operating activities of $1.3 billion or $2.6 billion excluding IBM Financing receivables. IBM's free cash flow was $2.1 billion. The company returned $1.5 billion to shareholders in dividends in the second quarter.

On a consolidated basis, for the first six months of the year, the company generated net cash from operating activities of $4.6 billion or $4.2 billion excluding IBM Financing receivables. IBM's free cash flow was $3.3 billion, which includes cash impacts from the company's structural actions initiated at the end of 2020.

IBM ended the second quarter with $7.8 billion of cash on hand (which includes marketable securities), up $0.2 billion from year-end 2021. Debt, including IBM Financing debt of $12.3 billion, totaled $50.3 billion, down $1.4 billion since the end of 2021.

Full-Year 2022 Expectations

  • Revenue growth: The company continues to expect constant currency revenue growth at the high end of its mid-single digit model. The company also expects an additional 3.5 point contribution from incremental sales to Kyndryl. At mid-July 2022 foreign exchange rates, currency is expected to be about a six-point headwind.
  • Free Cash Flow: The company now expects about $10 billion in consolidated 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. 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
On November 3, 2021, IBM completed the separation of Kyndryl. Unless otherwise specified, results are presented on a continuing operations basis. All references to revenue impacts from sales to Kyndryl are incremental sales post-separation.

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;
  • consolidated free cash flow;
  • consolidated cash from operating activities excluding IBM Financing receivables;

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.

Conference Call and Webcast
IBM's regular quarterly earnings conference call is scheduled to begin at 5:00 p.m. EDT, today. The Webcast may be accessed via a link at https://www.ibm.com/investor/events/earnings-2q22. 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




Six Months Ended





June 30,




June 30,





2022


2021*




2022


2021*



REVENUE

















Software


$

6,166


$

5,795




$

11,938


$

10,933



Consulting



4,809



4,378





9,637



8,641



Infrastructure



4,235



3,560





7,453



6,853



Financing



146



209





300



417



Other



180



277





404



561



TOTAL REVENUE



15,535



14,218





29,732



27,405




















GROSS PROFIT



8,290



7,852





15,625



14,879




















GROSS PROFIT MARGIN

















Software



79.2

%


79.7

%




79.0

%


78.8

%


Consulting



24.2

%


27.6

%




24.3

%


27.7

%


Infrastructure



53.8

%


57.1

%




52.4

%


56.7

%


Financing



35.3

%


29.9

%




36.5

%


32.7

%



















TOTAL GROSS PROFIT MARGIN



53.4

%


55.2

%




52.6

%


54.3

%



















EXPENSE AND OTHER INCOME

















S,G&amp;A



4,855



4,849





9,452



9,536



R,D&amp;E



1,673



1,641





3,352



3,257



Intellectual property and custom development income



(176)



(133)





(297)



(278)



Other (income) and expense



(81)



302





166



647



Interest expense



297



281





607



561



TOTAL EXPENSE AND OTHER INCOME



6,568



6,940





13,280



13,724




















INCOME/(LOSS) FROM CONTINUING OPERATIONS

















BEFORE INCOME TAXES



1,722



912





2,345



1,155



Pre-tax margin



11.1

%


6.4

%




7.9

%


4.2

%


Provision for/(Benefit from) income taxes



257



101





218



(58)



Effective tax rate



14.9

%


11.1

%




9.3

%


(5.0)

%



















INCOME FROM CONTINUING OPERATIONS


$

1,465


$

810




$

2,127


$

1,213




















DISCONTINUED OPERATIONS

















Income/(Loss) from discontinued operations, net of taxes



(73)



515





(2)



1,067




















NET INCOME


$

1,392


$

1,325




$

2,125


$

2,280




















EARNINGS/(LOSS) PER SHARE OF COMMON STOCK

















Assuming Dilution

















Continuing Operations


$

1.61


$

0.90




$

2.34


$

1.34



Discontinued Operations


$

(0.08)


$

0.57




$

0.00


$

1.18



TOTAL


$

1.53


$

1.47




$

2.34


$

2.52




















Basic

















Continuing Operations


$

1.62


$

0.91




$

2.36


$

1.36



Discontinued Operations


$

(0.08)


$

0.57




$

0.00


$

1.19



TOTAL


$

1.54


$

1.48




$

2.36


$

2.55




















WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (M's)

















Assuming Dilution



910.7



904.2





910.0



903.0



Basic



901.5



895.0





900.4



894.3



____________________

* Recast to conform with 2022 presentation.

INTERNATIONAL BUSINESS MACHINES CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEET

(Unaudited)




At


At



June 30,


December 31,

(Dollars in Millions)


2022


2021

ASSETS:







Current Assets:







Cash and cash equivalents


$

7,034


$

6,650

Restricted cash



220



307

Marketable securities



524



600

Notes and accounts receivable - trade, net



5,867



6,754

Short-term financing receivables, net



7,233



8,014

Other accounts receivable, net



909



1,002

Inventories



1,684



1,649

Deferred costs



1,010



1,097

Prepaid expenses and other current assets



3,414



3,466

Total Current Assets



27,896



29,539








Property, plant and equipment, net



5,275



5,694

Operating right-of-use assets, net



2,848



3,222

Long-term financing receivables, net



5,316



5,425

Prepaid pension assets



9,930



9,850

Deferred costs



865



924

Deferred taxes



7,073



7,370

Goodwill



55,039



55,643

Intangibles, net



11,571



12,511

Investments and sundry assets



1,689



1,823

Total Assets


$

127,503


$

132,001








LIABILITIES:







Current Liabilities:







Taxes


$

1,742


$

2,289

Short-term debt



5,981



6,787

Accounts payable



3,707



3,955

Deferred income



12,522



12,518

Operating lease liabilities



884



974

Other liabilities



7,008



7,097

Total Current Liabilities



31,844



33,619








Long-term debt



44,328



44,917

Retirement related obligations



13,118



14,435

Deferred income



3,069



3,577

Operating lease liabilities



2,182



2,462

Other liabilities



13,486



13,996

Total Liabilities



108,026



113,005








EQUITY:







IBM Stockholders' Equity:







Common stock



57,802



57,319

Retained earnings



153,298



154,209

Treasury stock — at cost



(169,522)



(169,392)

Accumulated other comprehensive income/(loss)



(22,169)



(23,234)

Total IBM Stockholders' Equity



19,409



18,901








Noncontrolling interests



67



95

Total Equity



19,476



18,996








Total Liabilities and Equity


$

127,503


$

132,001

INTERNATIONAL BUSINESS MACHINES CORPORATION

CASH FLOW ANALYSIS

(Unaudited)
















Trailing Twelve



Three Months Ended


Six Months Ended


Months Ended



June 30,


June 30,


June 30,

(Dollars in Millions)


2022


2021


2022


2021


2022

Consolidated Net Cash from Operations per GAAP


$

1,321


$

2,625


$

4,569


$

7,539


$

9,826

















Less: change in IBM Financing receivables



(1,264)



900



367



3,763



511

Capital Expenditures, net



(494)



(688)



(871)



(1,217)



(2,035)

















Consolidated Free Cash Flow



2,091



1,037



3,331



2,559



7,279

















Acquisitions



(260)



(1,747)



(958)



(2,866)



(1,385)

Divestitures



1,207



(10)



1,268



(25)



1,408

Dividends



(1,488)



(1,467)



(2,963)



(2,924)



(5,907)

Non-Financing Debt



(2,934)



(586)



1,740



(2,331)



2,880

Other (includes IBM Financing net receivables and debt)



(1,607)



(335)



(2,197)



(522)



(4,661)

















Change in Cash, Cash Equivalents, Restricted Cash and Short-term
Marketable Securities*


$

(2,991)


$

(3,108)


$

221


$

(6,110)


$

(387)

____________________

* Cash flows are presented on a consolidated basis.

INTERNATIONAL BUSINESS MACHINES CORPORATION

CASH FLOW

(Unaudited)




Three Months Ended


Six Months Ended



June 30,


June 30,

(Dollars in Millions)


2022


2021


2022


2021

Net Income from Operations


$

1,392


$

1,325


$

2,125


$

2,280

Depreciation/Amortization of Intangibles



1,245



1,680



2,501



3,352

Stock-based Compensation



254



243



488



457

Working Capital / Other



(307)



(1,524)



(912)



(2,313)

IBM Financing A/R



(1,264)



900



367



3,763

Net Cash Provided by Operating Activities


$

1,321


$

2,625


$

4,569


$

7,539

Capital Expenditures, net of payments &amp; proceeds



(494)



(688)



(871)



(1,217)

Divestitures, net of cash transferred



1,207



(10)



1,268



(25)

Acquisitions, net of cash acquired



(260)



(1,747)



(958)



(2,866)

Marketable Securities / Other Investments, net



(281)



(227)



(625)



(562)

Net Cash Provided by/(Used in) Investing Activities


$

172


$

(2,671)


$

(1,186)


$

(4,671)

Debt, net of payments &amp; proceeds



(2,514)



(1,500)



434



(5,799)

Dividends



(1,488)



(1,467)



(2,963)



(2,924)

Financing - Other



(195)



(163)



(290)



(190)

Net Cash Provided by/(Used in) Financing Activities


$

(4,197)


$

(3,131)


$

(2,819)


$

(8,914)

Effect of Exchange Rate changes on Cash



(262)



69



(267)



(65)

Net Change in Cash, Cash Equivalents and Restricted Cash*


$

(2,965)


$

(3,108)


$

297


$

(6,110)

____________________

* Cash flows are presented on a consolidated basis.

INTERNATIONAL BUSINESS MACHINES CORPORATION

SEGMENT DATA

(Unaudited)





Three Months Ended June 30, 2022













(Dollars in Millions)


Software


Consulting


Infrastructure


Financing


Revenue


$

6,166


$

4,809


$

4,235


$

146


Pre-tax Income/(Loss) from Continuing Operations


$

1,375


$

343


$

757


$

102


Pre-tax Margin



22.3

%


7.1

%


17.9

%


69.7

%

Change YTY Revenue



6.4

%


9.8

%


19.0

%


(29.9)

%

Change YTY Revenue - constant currency



11.6

%


17.8

%


25.4

%


(26.6)

%































Three Months Ended June 30, 2021*













(Dollars in Millions)


Software


Consulting


Infrastructure


Financing


Revenue


$

5,795


$

4,378


$

3,560


$

209


Pre-tax Income/(Loss) from Continuing Operations


$

1,059


$

270


$

489


$

131


Pre-tax Margin



18.3

%


6.2

%


13.7

%


63.0

%

____________________

* Recast to conform with 2022 presentation.


















Six Months Ended June 30, 2022













(Dollars in Millions)


Software


Consulting


Infrastructure


Financing


Revenue


$

11,938


$

9,637


$

7,453


$

300


Pre-tax Income/(Loss) from Continuing Operations


$

2,509


$

691


$

956


$

186


Pre-tax Margin



21.0

%


7.2

%


12.8

%


62.0

%

Change YTY Revenue



9.2

%


11.5

%


8.8

%


(28.0)

%

Change YTY Revenue - constant currency



13.4

%


17.6

%


13.4

%


(25.5)

%













































Six Months Ended June 30, 2021*













(Dollars in Millions)


Software


Consulting


Infrastructure


Financing


Revenue


$

10,933


$

8,641


$

6,853


$

417


Pre-tax Income/(Loss) from Continuing Operations


$

1,717


$

547


$

780


$

229


Pre-tax Margin



15.7

%


6.3

%


11.4

%


55.0

%

____________________

* Recast to conform with 2022 presentation.

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, 2022




Continuing Operations







Acquisition-


Retirement-


Tax


Kyndryl-










Related


Related


Reform


Related


Operating




GAAP


Adjustments (1)


Adjustments (2)


Impacts


Impacts (3)


(Non-GAAP)


Gross Profit


$

8,290


$

180


$


$


$


$

8,470


Gross Profit Margin



53.4

%


1.2

pts.


pts.


pts.


pts.


54.5

%

S,G&amp;A


$

4,855


$

(279)


$


$


$

(0)


$

4,576


Other (Income) &amp; Expense



(81)



(1)



(192)





(145)



(418)


Total Expense &amp; Other (Income)



6,568



(280)



(192)





(145)



5,952


Pre-tax Income from Continuing
Operations



1,722



460



192





145



2,518


Pre-tax Income Margin from
Continuing Operations



11.1

%


3.0

pts.


1.2

pts.


pts.


0.9

pts.


16.2

%

Provision for/(Benefit from) Income
Taxes
(4)


$

257


$

115


$

46


$

(4)


$


$

413


Effective Tax Rate



14.9

%


1.8

pts.


0.7

pts.


(0.2)

pts.


(0.9)

pts.


16.4

%

Income from Continuing Operations


$

1,465


$

345


$

146


$

4


$

145


$

2,105


Income Margin from Continuing
Operations



9.4

%


2.2

pts.


0.9

pts.


0.0

pts.


0.9

pts.


13.5

%

Diluted Earnings/(Loss) Per Share:
Continuing Operations


$

1.61


$

0.38


$

0.16


$

0.00


$

0.16


$

2.31





Three Months Ended June 30, 2021




Continuing Operations







Acquisition-


Retirement-


Tax


Kyndryl-










Related


Related


Reform


Related


Operating




GAAP


Adjustments (1)


Adjustments (2)


Impacts


Impacts (3)


(Non-GAAP)


Gross Profit


$

7,852


$

179


$


$


$


$

8,031


Gross Profit Margin



55.2

%


1.3

pts.


pts.


pts.


pts.


56.5

%

S,G&amp;A


$

4,849


$

(294)


$


$


$


$

4,555


Other (Income) &amp; Expense



302



(1)



(317)







(16)


Total Expense &amp; Other (Income)



6,940



(294)



(317)







6,329


Pre-tax Income/(Loss) from Continuing
Operations



912



474



317







1,702


Pre-tax Income Margin from
Continuing Operations



6.4

%


3.3

pts.


2.2

pts.


pts.


pts.


12.0

%

Provision for/(Benefit from) Income
Taxes
(4)


$

101


$

105


$

53


$

(14)


$


$

246


Effective Tax Rate



11.1

%


3.1

pts.


1.0

pts.


(0.8)

pts.


pts.


14.5

%

Income from Continuing Operations


$

810


$

368


$

264


$

14


$


$

1,456


Income Margin from Continuing
Operations



5.7

%


2.6

pts.


1.9

pts.


0.1

pts.


pts.


10.2

%

Diluted Earnings/(Loss) Per Share:
Continuing Operations


$

0.90


$

0.41


$

0.29


$

0.01


$


$

1.61


____________________

(1) Includes amortization of purchased intangible assets, in process R&amp;D, transaction costs, applicable restructuring and related expenses, tax charges related to acquisition
integration and pre-closing charges, such as financing costs.

(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) Primarily relates to the fair value changes in the retained Kyndryl common stock and the related cash-settled swap.

(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

U.S. GAAP TO OPERATING (Non-GAAP) RESULTS RECONCILIATION

(Unaudited; Dollars in millions except per share amounts)




Six Months Ended June 30, 2022




Continuing Operations







Acquisition-


Retirement-


Tax


Kyndryl-










Related


Related


Reform


Related


Operating




GAAP


Adjustments (1)


Adjustments (2)


Impacts


Impacts (3)


(Non-GAAP)


Gross Profit


$

15,625


$

361


$


$


$


$

15,986


Gross Profit Margin



52.6

%


1.2

pts.


pts.


pts.


pts.


53.8

%

S,G&amp;A


$

9,452


$

(565)


$


$


$

(0)


$

8,887


Other (Income) &amp; Expense



166



(1)



(394)





(367)



(596)


Total Expense &amp; Other (Income)



13,280



(566)



(394)





(367)



11,953


Pre-tax Income from Continuing
Operations



2,345



928



394





367



4,033


Pre-tax Income Margin from
Continuing Operations



7.9

%


3.1

pts.


1.3

pts.


pts.


1.2

pts.


13.6

%

Provision for/(Benefit from) Income
Taxes
(4)


$

218


$

224


$

104


$

112


$


$

657


Effective Tax Rate



9.3

%


3.4

pts.


1.7

pts.


2.8

pts.


(0.8)

pts.


16.3

%

Income from Continuing Operations


$

2,127


$

704


$

290


$

(112)


$

367


$

3,376


Income Margin from Continuing
Operations



7.2

%


2.4

pts.


1.0

pts.


(0.4)

pts.


1.2

pts.


11.4

%

Diluted Earnings/(Loss) Per Share:
Continuing Operations


$

2.34


$

0.77


$

0.32


$

(0.12)


$

0.40


$

3.71
























Six Months Ended June 30, 2021




Continuing Operations







Acquisition-


Retirement-


Tax


Kyndryl-










Related


Related


Reform


Related


Operating




GAAP


Adjustments (1)


Adjustments (2)


Impacts


Impacts (3)


(Non-GAAP)


Gross Profit


$

14,879


$

353


$


$


$


$

15,232


Gross Profit Margin



54.3

%


1.3

pts.


pts.


pts.


pts.


55.6

%

S,G&amp;A


$

9,536


$

(582)


$


$


$


$

8,954


Other (Income) &amp; Expense



647



(1)



(649)







(3)


Total Expense &amp; Other (Income)



13,724



(583)



(649)







12,491


Pre-tax Income from Continuing
Operations



1,155



936



649







2,741


Pre-tax Income Margin from
Continuing Operations



4.2

%


3.4

pts.


2.4

pts.


pts.


pts.


10.0

%

Provision for/(Benefit from) Income
Taxes
(4)


$

(58)


$

238


$

86


$

6


$


$

272


Effective Tax Rate



(5.0)

%


10.4

pts.


4.3

pts.


0.2

pts.


pts.


9.9

%

Income from Continuing Operations


$

1,213


$

699


$

563


$

(6)


$


$

2,469


Income Margin from Continuing
Operations



4.4

%


2.5

pts.


2.1

pts.


(0.0)

pts.


pts.


9.0

%

Diluted Earnings/(Loss) Per Share:
Continuing Operations


$

1.34


$

0.77


$

0.62


$

(0.01)


$


$

2.73


____________________

(1) Includes amortization of purchased intangible assets, in process R&amp;D, transaction costs, applicable restructuring and related expenses, tax charges related
to acquisition integration and pre-closing charges, such as financing costs.

(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) Primarily relates to the fair value changes in the retained Kyndryl common stock and the related cash-settled swap.

(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.

Cision View original content to obtain multimedia:https://www.prnewswire.com/news-releases/ibm-releases-second-quarter-results-301588504.html

SOURCE IBM

Mon, 18 Jul 2022 08:10:00 -0500 text/html https://stockhouse.com/news/press-releases/2022/07/18/ibm-releases-second-quarter-results
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