International Business Machines Earnings Call Nuggets: Linearity and Services Revenue Growth

International Business Machines Corp (NYSE:IBM) recently reported its fourth quarter earnings and discussed the following topics in its earnings conference call.

Linearity

Bill Shope – Goldman Sachs: On your prior earnings call, you had mentioned that the month of September was more challenging than the first two months of the third quarter. Can you talk about how the broader environment and your execution evolved into the December quarter and was there anything unusual this time around that you’d call out in terms of linearity?

Mark Loughridge – SVP and CFO, Finance and Enterprise Transformation: Good question bill. Really, if you look at the monthly performance across the quarter, it was really pretty constant. We saw a good performance through the quarter. Obviously within that, we feel very, very good about the performance we saw in our Software business with key branded middleware of 6%. Breakout performance from our z series content, revenue up 56%. Within that the growth markets up I think a spectacular 65%, MIPS up 66%. The biggest MIPS performance in the history IBM Corporation and its ongoing contribution from our base businesses, and with all that to generate half of our free cash flow in the quarter and a total of $18.2 billion, the largest ever, up $1.6 year-to-year, I think that was just a very, very strong quarter. But if you look across the months, it was fairly constantly month-to-month.