IBM shares jump on earnings and revenue beat
IBM shares rose 5% in extended trading on Wednesday, after the company reported second-quarter results that surpassed analysts' predictions.
Here are the key numbers.
Revenue increased 1.9% from $15.48 billion a year ago, IBM said in a statement. Net income of $1.83 billion, or $1.96 per share, was up from $1.58 billion, or $1.72 per share, a year earlier.
The company, which provides hardware, software and consulting services, now expects 2024 free cash flow to come in above $12 billion. In April, executives were calling for about $12 billion.
The company's book of business for generative artificial intelligence now stands above $2 billion, CEO Arvind Krishna was quoted as saying in the statement. The number was over $1 billion in April.
"We remain confident in the positive macro outlook for technology spending," Krishna said on a conference call with analysts.
But he said the company acknowledges continuing impact from higher interest rates and inflation.
"The geopolitical uncertainty has gone longer than most people expected, and that weighs into people's heads, about what that might happen, and specifically the war in Europe, as well as the war in the Middle East," Krishna said.
IBM said its software business brought in revenue of $6.74 billion, up 7% and more than the StreetAccount consensus of $6.49 billion.
The consulting unit contributed $5.18 billion in revenue. That was down 0.9% and below the $5.23 billion StreetAccount consensus.
IBM's infrastructure segment that contains mainframe computers posted $3.65 billion in revenue, up 0.8% and higher than the $3.51 billion consensus. The revenue performance for the current z16 mainframe computer is still outperforming earlier cycles, said IBM's finance chief, Jim Kavanaugh.
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