India emerges IBM’s bright spot with 10.3% rise in 2015-16 revenues to $3.43 bn

India has emerged a bright spot for IBM with 10.3-per cent growth in revenues to $3.43 billion in 2015-16 against $3.11 billion in 2014-15 helped by robust performance of its domestic IT and export and IT services businesses.

In recognition of the sterling performance, IBM has elevated Amit Sharma, COO for IBM India and South Asia, as global COO, IBM GBS (Global Business Services) Application Innovation Consulting.

Sharma has held several senior roles in IBM, with responsibilities spanning finance, corporate and business development, sales operations and strategy. He now replaces Clare Smart, who was part of GBS Europe and who is moving to a new role in the firm.

IBM has not appointed anybody yet to Sharma's previous position in India.

IBM globally has seen its revenue decline for 18 consecutive quarters, while IBM India's net profit rose 12.6 per cent to $242 million. Operating profit increased by about 5 per cent, from $441 million to $463 million.

IT business (domestic and export) grew 10.6 per cent to $731 million while IT services business grew 13.6 per cent to $2.34 billion. The export business growth is better than that for most Indian IT services companies. Nasscom had estimated that the industry average growth in the year was 12.3 per cent in constant currency.

IBM India's export business growth is better compared to most Indian IT services companies. Nasscom had estimated that the industry average growth in the year was 12.3 per cent in constant currency.

IBM India's performance stands out because IBM's Asia-Pacific business has decelerated due to a decline in the Japan business and weaker performance in China.

CFO Martin Schroeter had, in the June and October quarters, called out for IBM India's performance, which has been substantiated by the financials it has filed most recently with the Registrar of Companies.

IBM India had some 133 executives receiving a salary of Rs1 crore or more in the year. Infosys had 49 executives with compensation of Rs1 crore or more in the same year. IBM has some 1.3 lakh employees in India.

IBM India has four primary business segments - hardware, software, financing, and sale of services (includes domestic IT services and export IT services). The sales from hardware and software dropped 16.4 per cent and 4.9 per cent, respectively, in 2015-16.

The company has merged three subsidiaries in India - Bigfix Software, Telelogic India and Unica Softtech Systems India - into Sterling Commerce Solutions India and a one-step down subsidiary IBM Business Consulting Services.

IBM globally has seen its revenue decline for 18 consecutive quarters, as the company struggles to deal with the massive changes in the technology environment towards cloud and mobile. It is investing significantly in areas like analytics and cognitive computing.

It has an analytics centre of excellence in Bengaluru. Last year, it launched its first public cloud data centre in Chennai as part of a $1.2 billion investment to grow its cloud footprint. A few months ago, it opened a mobile first iOS Garage in Bengaluru that's part of its network of centres in Atlanta, Cupertino and Chicago to drive digital transformation on the iOS platform

Amit Sharma, COO for IBM India and South Asia, has been elevated as global COO, IBM GBS (Global Business Services) Application Innovation Consulting. Sharma has held several senior roles in IBM, with responsibilities spanning finance, corporate & business development, sales operations and strategy. He now replaces Clare Smart, who was part of GBS Europe and who is moving to a new role in the firm. IBM has not appointed anybody yet to Sharma's previous position in India.

IBM globally reported continued strong growth in Strategic Imperatives led by IBM Cloud and Analytics in the third quarter of the current year.

Third-quarter revenues from the company's strategic imperatives --- cloud, analytics, mobility and security - increased 16 per cent year to year (up 15 per cent adjusting for currency). Cloud revenues (public, private and hybrid) for the quarter increased 44 per cent (up 42 per cent adjusting for currency).

Cloud revenue over the trailing 12 months was $12.7 billion. The annual run rate for cloud as-a-Service revenue - a subset of total cloud revenue - increased to $7.5 billion from $4.5 billion in the third quarter of 2015.

Revenues from analytics increased 15 per cent (up 14 per cent adjusting for currency).

Revenues from mobile increased 19 per cent and revenues from security increased 11 per cent.

For the full year, the company continues to expect operating (non-GAAP) diluted earnings per share of at least $13.50 and GAAP diluted earnings per share of at least $12.23.

Operating (non-GAAP) diluted earnings per share exclude $1.27 per share of charges for amortization of purchased intangible assets, other acquisition-related charges and retirement-related charges. There is no change to IBM's previously provided free cash flow guidance.

The company generated net cash from operating activities of $4.2 billion; or $3.3 billion excluding global financing receivables. IBM's free cash flow was $2.4 billion in the third quarter. IBM returned $1.3 billion in dividends and $0.9 billion of gross share repurchases to shareholders. At the end of September 2016, IBM had $3.0 billion remaining in the current share repurchase authorisation.

IBM ended the third-quarter 2016 with $10.0 billion of cash on hand. Debt, including global financing debt of $26.1 billion, totaled $42.5 billion. Core (non-global financing) debt totaled $16.4 billion. The balance sheet remains strong and is well positioned to support the business over the long term.