IBM Hits on Bottom Line, Misses on Sales
Has IBM benefited from the overall uptick in corporate spending?
Posting second-quarter results after the market’s close Monday, the company reported earnings per share of $2.61, up from $2.32 a share last year. and sales of $23.72 billion, up from $23.25 billion last year. Analysts polled by Thomson Reuters had been looking for earnings of $2.58 a share on $24.2 billion in revenue. So while the company’s higher profit exceeded expectations, its revenue came as something of a disappointment, and investors have dragged its shares down about three percent in after-hours trading.
Looking ahead, IBM (IBM) raised its 2010 net income guidance to $11.25 per share. That’s a nickel-per-share increase over its most recent guidance and suggests the company is confident that uptick in spending will continue.
Said CEO Sam Palmisano, “In the second quarter we again delivered double-digit earnings-per-share growth, increased margins, as well as improving constant-currency revenue performance in our ongoing software, services and hardware businesses, and in all geographies. With the benefit of our strategic growth investments, our mix of higher-value business and the introduction of new System z and Power Systems, we are confident of our ability in the second half of the year to continue our strong business performance, grow profit and drive shareholder returns.”