"2007 was a superb year for IBM" - Sam Palmisano at 2008 Annual Stockholders Meeting
The reasons for that success aren't a secret. IBM's Chairman and CEO Sam Palmisano told stockholders that "we achieved record revenue, profit, earnings per share, and cash performance" as a result of the company's strategic global reach and responsiveness to clients.
He also announced a 25% increase in IBM's quarterly dividend, to $0.50. With the June 10 dividend, IBM will have paid 370 consecutive quarterly dividends, starting in 1916.
IBM held its annual meeting Tuesday (29 April 2008) in Charlotte, NC. Prior to the meeting, North Carolina Governor Mike Easley announced a state investment for a job development program that will result in 600 new Charlotte-area jobs in the recently announced IBM Lender Business Processing Services (LBPS) business unit.
Sustainable performance
In his report, Palmisano also cited several examples of recent achievements and stated:
"There are many reasons for this performance, and for why we believe it is sustainable. Let me comment on two - our geographic reach and our ability to quickly adjust to changing client demand.
"As you know, in many of the major markets today we see a changing economic environment. Yet clients are still willing to invest in information technology:
- to cut costs
- to conserve capital
- to provide a faster payback on their investment... and
- to address urgent business needs like risk management, security and energy efficiency."
"IBM also performed well because of our broad global presence. The first quarter saw continued robust growth in the world's emerging markets, as we focus on building out the infrastructures in these countries.
"Palmisano gave several examples of ways the investment in emerging markets is yielding results, continuing, pointing to the company's "build-out of public and private infrastructures to support three billion people moving into the middle class. In each of more than 50 countries - including Poland, Malaysia, Singapore, South Africa and Mexico - we grew revenues by more than 10 percent last year."
"So we feel good about our start to 2008. In fact, we raised our EPS (Earnings Per Share) projection for the year by 25 cents. We now expect 2008 full year earnings per share of at least $8.50, which is 18 percent growth over 2007's reported results.
"In an economic environment where many firms are struggling, we are demonstrating again your company's historic ability to balance an aggressive growth strategy with disciplined attention to productivity and cost. We are operating ambidextrously, as the times demand, and the results speak for themselves.
5 Reasons for optimism
"Given all that is playing out in global economies today, some people are asking if we can continue to perform, if we can continue to produce profitable growth. I believe we can. Let me offer five reasons:
- We have unmatched global reach & scale. IBM is diversified globally... operating in 170 countries, with 63 percent of our revenue coming from outside the U.S. in 2007.
- We are the world's preeminent IT infrastructure provider... at the beginning of the most significant data center transformation in decades. One analyst firm projects that more than 70 percent of the Global 1000 will modify their data centers significantly in the next 5 years.
Why? They are running out of space and energy and need to better utilize the technology they've installed. And IBM is ideally poised to help. We are the historic leader in IT infrastructure, and this year we have the strongest lineup of new products and services for the data center in years.
Last month we launched our strategy for the New Enterprise Data Center, combining leading-edge capabilities in SOA, energy-saving "green" solutions, virtualization and new approaches such as "cloud" computing, on which we are partnering with Google.
- We deliver unique client value. Even in uncertain economic times, one thing remains constant: Businesses invest in IT. IT saves them money, and it manages business-critical needs.
- We are the business world's technology leader. 2007 was our 15th consecutive year of U.S. patent leadership. IBM is the undefeated champ of advanced information technology. And we have acquired more than 60 companies over the past 5 years to complement and scale our existing portfolio.
- Finally, we are financially strong and flexible. Our focus on higher-value offerings helps drive profitable growth and strong cash generation. It has enabled IBM to return value to shareholders and to invest opportunistically for growth.
Foundation for continued growth
"As we stand poised before a profoundly new era of technology, business and society, I strongly believe that there is no other company that is as well positioned for leadership, in all the ways that a business can lead.
"That belief is grounded not in any particular products, services, assets or resources. Those come and go. What produces profitable growth, superior return on invested capital and strong cash flow is a clear vision of the future... and disciplined execution by a team that's experienced in managing change. All this builds long-term value."
You'll find the report in greater detail, along with the proxy statement and the final stockholder voting results at http://www.ibm.com/investor/services/meetings.phtml
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