IBM, the multinational information technology company, announced its second-quarter financial results on Wednesday. While revenue dipped slightly compared to the previous year, the company reported higher profits, exceeding analysts’ expectations. Here are the key highlights:
Revenue
IBM recorded a revenue of $15.48 billion in the second quarter, a slight decrease from $15.54 billion in the same period last year. Despite the decline, the figures were in line with analysts’ predicted revenue of $15.58 billion.
Adjusted Earnings
On an adjusted basis, IBM’s earnings per share stood at $2.18. This surpassed analysts’ estimates of $2.01 per share.
Net Income
IBM reported a net income of $1.58 billion, an increase from $1.39 billion in the prior-year period. This exceeded analysts’ expectations of $1.26 billion.
Consulting Segment
IBM’s consulting segment showcased promising results, with a revenue of $5.01 billion, marking a 4.3% increase from the previous year. Despite some deceleration in the consulting sector, IBM’s Chief Executive Arvind Krishna remains optimistic, stating that clients still prioritize digital transformation initiatives.
Commentary
Jim Kavanaugh, IBM’s Chief Financial Officer, attributed the positive revenue performance to growth in the software and consulting divisions. According to Kavanaugh, the company’s gross profit margin has improved due to an enhanced portfolio mix and increased productivity.
Outlook
IBM maintains its outlook for constant currency revenue growth of 3% to 5% by 2023. The company also expects to generate approximately $10.5 billion in free cash flow for the year.
