International Business Machines Corporation (NYSE:IBM) Q1 2016 Earnings Conference Call Transcript

Apr 18, 2016 • 05:00 pm ET


International Business Machines Corporation (NYSE:IBM) Q1 2016 Earnings Conference Call Transcript


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Welcome and thank you for standing by. At this time, all participants are in listen-only mode. Today's conference is being recorded. If you have any objections, you may disconnect at this time. Now I'll turn the meeting over to Ms. Patricia Murphy. Ma'am, you may begin.

Patricia Murphy

Thank you. This is Patricia Murphy, VP of IR for IBM. I'm here today with Martin Schroeter, IBM's SVP and CFO. I'd like to welcome you to our first quarter earnings presentation.

The prepared remarks will be available within a couple of hours, and a replay of the webcast will be posted by this time tomorrow.

(Forward-Looking Cautionary Statements)

Our presentation also 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 will find reconciliation charts at the end of the presentation and in the Form 8-K submitted to the SEC.

Before turning the call over to Martin, I want to remind you that in our Investor briefing in late February we discussed a number of changes to our management system and our organizational structure. As a result, our segment reporting structure has been updated to reflect our business structure. We provided two years of historical financial information by quarter on these segments a few weeks ago. This can be found on our investor website. Today, we'll be discussing our first quarter results in this new segment structure.

In addition, you'll see that we've updated our earnings presentation slide not only to address the new segment structure, but also to provide additional disclosure on our strategic imperatives and to provide more commentary on the business drivers.

So with that, I'll turn the call over to Martin Schroeter.

Martin Schroeter

Thanks, Patricia. Again this quarter, we made a lot of progress in transforming our business and we got done what we set out to do to start the year.

We delivered $18.7 billion in revenue, $2.3 billion in net income and operating earnings per share of $2.35. Importantly, we also made significant investments and took significant actions to accelerate our transformation and move our business into new areas.

Our enterprise clients are looking to get greater value from their data and their IT environments. They're not just focused on reducing cost and driving efficiency, but using data to improve decision-making and outcomes. They're looking to become digital enterprises that are differentiated by cognitive.

Our strategy is based on the point of view that this requires a solutions focused industry expertise and innovative technology, all supported by leading edge skills. And so to move our clients to the future, we've been making significant changes to our business. We're not only transforming our existing businesses, but building new markets and addressing new opportunity areas. We're creating cognitive solutions that marry digital business with digital intelligence.

We're bringing our industry expertise together with these cognitive solutions and we're building it all on cloud platforms. And because we're running our clients'