International Business Machines, Corp. (IBM)
Q4 2009 Earnings Call Transcript
January 19, 2010 4:30 p.m. ET

Executive

Patricia Murphy - Vice President and Investor Relations
Mark Loughridge - Senior Vice President and Chief Financial Officer

Analysts

Richard Gardner - Citi
Toni Sacconaghi - Sanford C. Bernstein & Company, Inc.
Benjamin Reitzes - Barclays Capital
Robert Cihra - Caris & Company
David Bailey - Goldman Sachs
Kathryn Huberty - Morgan Stanley
Chris Whitmore - Deutsche Bank
Louis Miscioscia - Brigantine Advisors
Scott Craig - Bank of America/Merrill Lynch
David Grossman - Thomas Weisel Partners

Presentation

Operator

Welcome, and thank you for standing by. At this time, all participants are in a listen-only mode. Today''s conference is being recorded. If you have any objections, you may disconnect at this time.

Now I will turn the meeting over to Ms. Patricia Murphy, Vice President of Investor Relations. Ma''am, you may begin.

Patricia Murphy

Thank you. This is Patricia Murphy, Vice President of Investor Relations for IBM. I''m here with Mark Loughridge, IBM''s Senior Vice President and Chief Financial Officer.

Thank you for joining our fourth quarter earnings presentation. The prepared remarks will be available in roughly an hour and a replay of this webcast will be posted to our Investor Relations website by this time tomorrow.

Our presentation includes certain non-GAAP financial measures in an effort to provide additional information to investors. All non-GAAP measures have been reconciled to their related GAAP measures in accordance with SEC rules. You''ll find reconciliation charts at the end and in the Form 8-K submitted to the SEC.

Let me remind you that certain comments made in this presentation may be characterized as forward-looking under the Private Securities Litigation Reform Act of 1995. Those statements involve a number of factors that could cause actual results to differ materially. Additional information concerning these factors is contained in the Company''s filings with the SEC. Copies are available from the SEC, from the IBM website, or from us in Investor Relations.

Now I''ll turn the call over to Mark Loughridge.

Mark Loughridge

Thank you for joining us today. The fourth quarter capped off a great year for IBM, driven by continued margin expansion, proper growth and cash generation, all in an uncertain environment.

Let me start out by sharing a few financial highlights. In Systems, we had substantial share gains in Power, 4 points; System x, 3 points; Blade, 6 points; and Storage, 1 point. In Software, we had share gains in WebSphere, Tivoli and Key Branded Middleware. And in Services, we''ve booked $18.8 billion of services signings and $57 billion for the year.

In 2009, outsourcing signings were up 9%, or 11% at constant currency. Once again, we had great profit and margin performance. This quarter, PTI grew 10%. We expanded margin and grew pretax profit in every segment. As we indicated in October, we had double-digit profit growth in Systems and Technology, up 15%.

For the year, PTI margin was up 2.8 points, led by Services up over 2 points; Software, up over 5 points and Financing, up over 6 points.