IBM Posts Q3 Revenue Of $26.2B With Net Income Up 7 Percent To $3.8B; Ups Outlook

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IBM has released its third quarter results today, with non-GAAP diluted earnings coming in at $3.28 per share, compared with operating diluted earnings of $2.85 per share in the third quarter of 2010, an increase of 15 percent. Analysts were expecting $3.22 per share with revenue of $26 billion. The company posted diluted earnings of $3.19 per share, compared with diluted earnings of $2.82 per share in the third quarter of 2010, an increase of 13 percent.

Big Blue’s third-quarter net income was $3.8 billion compared with $3.6 billion in the same quarter in 2010, an increase of 7 percent. Operating (non-GAAP) net income was $4 billion compared with $3.6 billion in the third quarter of 2010, an increase of 9 percent. Total revenue for the third quarter of 2011 of $26.2 billion increased 8 percent from the third quarter of 2010.

IBM chairman and CEO Samuel J. Palmisano said this in a statement: “In the third quarter, we drove revenue growth, margin expansion and increased earnings as a result of our innovation-based strategy and continued investment in growth initiatives…Growth markets delivered outstanding revenue performance across software, hardware, and services and contributed to the company’s expanded margins. We also achieved strong results in Smarter Planet, business analytics and cloud.”

Some of the growth markets he’s referring to are from the BRIC countries — Brazil, Russia, India and China. Revenues in the BRIC countries increased 17 percent, with total revenues from the company’s growth markets increased 19 percent. Growth markets revenue represents 23 percent of IBM’s total geographic revenue for the third quarter.

Revenues from the Software segment were $5.8 billion, an increase of 13 percent. Hardware revenues totaled $4.5 billion for the quarter, up 4 percent. IBM ended the third-quarter 2011 with $11.3 billion of cash on hand and generated free cash flow of $3.5 billion, up approximately $300 million year over year.

Because of this quarter’s strong earnings, IBM is raising its 2011 full-year operating earnings per share expectations to to at least $12.95 from at least $12.87, and for non-GAAP earnings to at least $13.35, from $13.25 per share.

You can listen and comment on IBM’s third-quarter earnings call, which starts at 4:30 pm ET, below.