IBM is cutting 3,900 jobs, about 1.5 per cent of its global workforce, as it reported a 16 per cent annual jump in fourth-quarter net profit driven by robust performance in the company's software and infrastructure units.
Net income during the October-December period rose to more than $2.7 billion, from the year earlier, the company said on Wednesday. On a quarterly basis, it improved from a net loss of $3.1 billion in the July-September period.
Fourth quarter total revenue remained flat at more than $16.7 billion, exceeding analysts’ estimates of $16.4 billion.
During a conference call, IBM also announced layoffs for which it will register a $300 million charge in the first quarter of this year.
The layoffs are related to the spin-off of IBM's Kyndryl business and a part of AI unit Watson Health.
“Unlike many others over the last two to two and a half years that were hiring in tens and thousands of people … we are leveraging digitisation, AI automation, that drives efficiency, but we are committed to hiring for client-facing research and development,” IBM's chief financial officer James Kavanaugh told Reuters.
After a frenzy of hiring during the pandemic as a result of the pivot to digitalisation, many companies in the technology sector including Spotify, Meta, Amazon, Microsoft and Google's parent Alphabet have cut thousands of jobs. Central banks have increased interest rates to curb inflation but fears of a recession in the US are growing as a result of monetary tightening.
IBM shares fell about 2 per cent in after-hours trading on Wednesday to $137.98. In the regular trading session, the company’s shares closed down 0.52 per cent, to $140.76 a share.
Looking ahead to 2023, we expect full-year revenue growth consistent with our mid-single digit model
Arvind Krishna,
IBM’s chairman and chief executive
IBM’s infrastructure division earned $4.5 billion in sales, nearly 1.6 per cent up on a yearly basis.
The consulting arm, which included business transformation, technology consulting and application operations, contributed $4.8 billion, almost 0.5 per cent more than the prior year period.
IBM’s software business added about $7.3 billion in the fourth quarter. It was up by about 2.8 per cent year on year.
Financing, which includes clients and commercial financing, generated $200 million, down 0.4 per cent annually.
“Our solid fourth-quarter performance capped a year in which we grew revenue above our mid-single digit model,” Arvind Krishna, IBM’s chairman and chief executive, said.
“Clients in all geographies increasingly embraced our hybrid cloud and AI [artificial intelligence] solutions as technology remains a differentiating force in today’s business environment,” Mr Krishna said.
Following the earnings announcement, the company’s shares dropped 2.14 per cent to trade at $137.75 a share in after-hours trading.
The company’s full 2022 financial year’s net profit dropped 71.4 per cent to over $1.6 billion, while sales increased nearly 5.5 per cent to more than $60.5 billion.
On a consolidated basis, net cash from operating activities reached $10.4 billion and free cash flow stood at $9.3 billion in the last full financial year.
“Looking ahead to 2023, we expect full-year revenue growth consistent with our mid-single digit model,” Mr Krishna said.
On a consolidated basis, in the fourth quarter, the company generated net cash of $4 billion from operating activities, up $1.4 billion compared with the same period in 2021. Its free cash flow was $5.2 billion, up $1.9 billion. The company also returned $1.5 billion to shareholders in dividends in the fourth quarter.
“IBM’s revenue growth and operating profit in 2022 demonstrate the strength and multiplier effect of our platform-centric approach to hybrid cloud and AI,” said Mr Kavanaugh.
“Our client-focused portfolio and strong recurring revenue stream position IBM well for continued growth, solid cash generation and returning value to shareholders through dividends.”
IBM said it ended the fourth quarter with $8.8 billion of cash on hand (which includes marketable securities), up $1.3 billion from the end of 2021.
Debt, including IBM debt financing of $12.9 billion, totalled $50.9 billion. It was down by nearly $800 million since the end of 2021.
The Breadwinner
Director: Nora Twomey
Starring: Saara Chaudry, Soma Chhaya, Laara Sadiq
Three stars
Company profile
Name: Thndr
Started: October 2020
Founders: Ahmad Hammouda and Seif Amr
Based: Cairo, Egypt
Sector: FinTech
Initial investment: pre-seed of $800,000
Funding stage: series A; $20 million
Investors: Tiger Global, Beco Capital, Prosus Ventures, Y Combinator, Global Ventures, Abdul Latif Jameel, Endure Capital, 4DX Ventures, Plus VC, Rabacap and MSA Capital
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
Read part three: the age of the electric vehicle begins
Read part one: how cars came to the UAE
KILLING OF QASSEM SULEIMANI
Fund-raising tips for start-ups
Develop an innovative business concept
Have the ability to differentiate yourself from competitors
Put in place a business continuity plan after Covid-19
Prepare for the worst-case scenario (further lockdowns, long wait for a vaccine, etc.)
Have enough cash to stay afloat for the next 12 to 18 months
Be creative and innovative to reduce expenses
Be prepared to use Covid-19 as an opportunity for your business
* Tips from Jassim Al Marzooqi and Walid Hanna
THE SIXTH SENSE
Starring: Bruce Willis, Toni Collette, Hayley Joel Osment
Director: M. Night Shyamalan
Rating: 5/5
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Desert Warrior
Starring: Anthony Mackie, Aiysha Hart, Ben Kingsley
Director: Rupert Wyatt
Rating: 3/5
The specs
Engine: 2.0-litre 4-cyl turbo
Power: 247hp at 6,500rpm
Torque: 370Nm from 1,500-3,500rpm
Transmission: 10-speed auto
Fuel consumption: 7.8L/100km
Price: from Dh94,900
On sale: now
The%20US%20Congress%20explained
%3Cp%3E-%20Congress%20is%20one%20of%20three%20branches%20of%20the%20US%20government%2C%20and%20the%20one%20that%20creates%20the%20nation's%20federal%20laws%3C%2Fp%3E%0A%3Cp%3E-%20Congress%20is%20divided%20into%20two%20chambers%3A%20The%20House%20of%20Representatives%20and%20the%20Senate%3C%2Fp%3E%0A%3Cp%3E-%C2%A0The%20House%20is%20made%20up%20of%20435%20members%20based%20on%20a%20state's%20population.%20House%20members%20are%20up%20for%20election%20every%20two%20years%3C%2Fp%3E%0A%3Cp%3E-%20A%20bill%20must%20be%20approved%20by%20both%20the%20House%20and%20Senate%20before%20it%20goes%20to%20the%20president's%20desk%20for%20signature%3C%2Fp%3E%0A%3Cp%3E-%20A%20political%20party%20needs%20218%20seats%20to%20be%20in%20control%20of%20the%20House%20of%20Representatives%3C%2Fp%3E%0A%3Cp%3E-%20The%20Senate%20is%20comprised%20of%20100%20members%2C%20with%20each%20state%20receiving%20two%20senators.%20Senate%20members%20serve%20six-year%20terms%3C%2Fp%3E%0A%3Cp%3E-%20A%20political%20party%20needs%2051%20seats%20to%20control%20the%20Senate.%20In%20the%20case%20of%20a%2050-50%20tie%2C%20the%20party%20of%20the%20president%20controls%20the%20Senate%3C%2Fp%3E%0A
The Pope's itinerary
Sunday, February 3, 2019 - Rome to Abu Dhabi
1pm: departure by plane from Rome / Fiumicino to Abu Dhabi
10pm: arrival at Abu Dhabi Presidential Airport
Monday, February 4
12pm: welcome ceremony at the main entrance of the Presidential Palace
12.20pm: visit Abu Dhabi Crown Prince at Presidential Palace
5pm: private meeting with Muslim Council of Elders at Sheikh Zayed Grand Mosque
6.10pm: Inter-religious in the Founder's Memorial
Tuesday, February 5 - Abu Dhabi to Rome
9.15am: private visit to undisclosed cathedral
10.30am: public mass at Zayed Sports City – with a homily by Pope Francis
12.40pm: farewell at Abu Dhabi Presidential Airport
1pm: departure by plane to Rome
5pm: arrival at the Rome / Ciampino International Airport
AL%20BOOM
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Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
RIVER%20SPIRIT
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