Thursday, April 18, 2024

IBM Revenue Declines, But Earnings Beat Expectations

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For the second quarter, IBM’s revenue declined, but its earnings exceeded analyst expectations. The company increased its guidance for the full year.

Darryl K. Taft with eWeek reported, “IBM beat expectations in its second-quarter 2013 earnings, despite a shortfall of 12 percent in its Systems and Technology revenue. Excluding a $1 billion ‘workforce rebalancing’ charge, IBM exceeded analyst expectations and reported earnings per share(EPS) of $3.91, which beat analyst expectations of $3.77 per share.”

The Wall Street Journal’s Spencer E. Ante noted, “International Business Machines Corp. posted a fifth-straight quarterly decline in revenue, underscoring the challenge Chief Executive Virginia Rometty faces getting the technology giant’s sales growing again. IBM remains a key provider of computer hardware, software and services to big corporations and governments around the world. But the Armonk, N.Y., company faces new competitors who rent computing power and software over the Internet, and has to find new sources of revenue as growth in some key emerging markets slows.”

Nicola Leske with Reuters added, “IBM raised its full-year outlook on Wednesday based on cost cutting and a strong software pipeline.”

ZDNet quoted IBM’s CFO Mark Loughridge, who said, “As we look at the second half, we have some very, very distinct tailwinds that we have driven to drive our performance. So first of all, we’ve got a very good software pipeline going into the second half of the year and if you look at that software performance in the second quarter. Not only did software grow, the total by 5%, but that key branded middleware was up 10% and we gained share in every single one of the sub-brands in that software business. We see real momentum going from that second quarter into the second half of the year. Secondly, we have services backlog growth on a constant currency basis of 7%. That is the best backlog growth positioning we’ve had in four years, going into the second half.”

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