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IBM reports higher profit despite lower revenue

Raises forecasts
Thu Jul 19 2012, 13:36

ENTERPRISE COMPUTING GIANT IBM managed to increase its second quarter profit by six per cent despite seeing revenue fall by three per cent.

IBM's recession busting performance over the past four years showed little sign of easing up, with the firm once again posting steady financials that suggest the firm is cutting inefficiencies. IBM announced second quarter revenue of $25.8bn, down three per cent, while profit rose by six per cent to $3.9bn.

IBM's traditional mainframe business saw an eight per cent decline in revenue and Big Blue's overall hardware business rang up $4.3bn in second quarter revenue, down nine per cent from the year previously.

Ginni Rometty, IBM president and CEO said, "In the second quarter, we delivered strong profit, earnings per share and free cash flow growth. This performance reflects continued strength in our growth initiatives and investments in higher value opportunities. These are fundamental elements of our long-term business model. Looking ahead, we are well positioned to deliver greater value to a wider range of clients and to our shareholders."

IBM, much like Intel, is seen as a bellwether information technology company, but unlike Intel it raised its full-year 2012 diluted earnings per share forecast. Since IBM's shares aren't traded for a quick buck its earnings per share figure is perhaps the most important number for investors. µ


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