International Business Machines Corp. (IBM) Invested $130 Billion in 10 Years, Earned $18 Billion Profit: Martin Schroeter

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In an article on CNBC, Martin Schroeter, CFO of International Business Machines Corp. (NYSE:IBM) talked about market strategy of his company and what model should the companies adapt in order to keep a balance between growth, market capital and shareholder returns. Schroeter started his idea by rejecting the notion that focusing on growth and risky investment precludes the shareholders returns. To prove that, he gave the example that S&P 1500 invested around $8 trillion in acquisitions and growth and returned back around $7 trillion to the shareholders over the last decade.

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International Business Machines Corp. (NYSE:IBM) CFO said that the company is no more looking to pile up equity capital. He said that the company’s secret in maintaining the balance between shareholder returns and growth is its investments in profit oriented projects. He said that International Business Machines Corp. (NYSE:IBM) is always keen to put its capital on the line where there are chances of profits, not just revenue. Next year, International Business Machines Corp. (NYSE:IBM) will celebrate 100th anniversary of its IPO. International Business Machines Corp. (NYSE:IBM) invested more than $130 billion over the last decade in multifarious domains like research and development, Cloud, acquisitions. The company’s revenue went up just 1% on a compound basis whereas the profits, the key part in International Business Machines Corp. (NYSE:IBM)’s strategy, were tripled— from $6 billion to $18 billion.

Schroeter said that International Business Machines Corp. (NYSE:IBM) made systems and infrastructure all around the world in its 100 year age. The company controls more than 70% of business data dynamics around the world. The cognitive systems like Watson, its Cloud base and office penetration has given International Business Machines Corp. (NYSE:IBM)  a unique marketplace, which has enormous growth potential. International Business Machines Corp. (NYSE:IBM)  has systems implanted in all sorts of domains like transportation, critical financial transactions and data management.

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