Bloomberg News

IBM Tapping ‘Gusher of Data’ to Reach 2015 Targets, CEO Says

March 12, 2012

International Business Machines Corp. (IBM) is tapping a “gusher of data” to achieve its 2015 growth targets, Chief Executive Officer Virginia “Ginni” Rometty said in her first annual letter to shareholders.

The world’s largest computer-services provider is “well on track” to its goal of generating at least $20 a share in operating earnings by 2015, up from $13.44 last year, Rometty reiterated in the 2011 annual report published over the weekend.

Rometty became the first female CEO in the company’s 100- year history in January. She succeeded Sam Palmisano, inheriting a five-year plan that includes boosting software to half of IBM’s earnings, with a focus on programs that help businesses analyze and project trends, as well as on cloud computing and emerging growth markets. Palmisano remains as chairman.

“We are uniquely positioned to deliver the benefits of a vast new natural resource -- a gusher of data from both man-made and natural systems that can now be tapped to help businesses and institutions succeed in an increasingly complex and dynamic global economy,” Rometty wrote. “Our strong strategic positioning, solid balance sheet, recurring revenue, robust profit streams and unmatched global reach give us confidence that we will achieve success in the next five years.”

IBM rose 0.2 percent to $200.96 at 1:13 p.m. New York time. Last week, the Armonk, New York-based company’s shares closed above $200 for the first time, factoring in stock splits.

Job Cuts

IBM will continue to make acquisitions and divestitures and “invest in market opportunities and drive productivity,” according to the annual report. The company said “workforce rebalancing charges,” which includes job cuts, will increase this year to the level they were in 2010.

“The company will continue to rebalance its workforce to opportunities and skills aligned with its key investments and hire resources to drive growth initiatives,” IBM said.

IBM didn’t provide details of job cuts. In 2010, it booked $641 million of “workforce rebalancing charges.” That figure fell to $440 million in 2011, the annual report shows.

About 1,650 jobs were cut in the U.S. and Canada last month, according to an employee advocacy group Alliance@IBM, which has been trying to organize IBM employees. Redundant employees may apply for other positions within IBM, severance documents show.

To contact the reporter on this story: Beth Jinks in New York at bjinks1@bloomberg.net.

To contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net.


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