IBM profit up 9%, revenue falls short

IBM profit up 9%, revenue falls short
AFP
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First Published: Tue, Jul 20 2010. 09 46 AM IST
Updated: Tue, Jul 20 2010. 09 46 AM IST
New York: IBM said Monday that second-quarter net profit rose 9% but currency fluctuations pushed the US computer giant’s revenue below the expectations of Wall Street analysts.
IBM reported a net profit of $3.4 billion, or $2.61 per share, in the quarter which ended on 30 June compared to $3.1 billion, or $2.32 per share, in the same quarter a year ago.
Revenue increased 2% to $23.7 billion, less than the $24.2 billion forecast by analysts. IBM said currency fluctuations reduced revenue by some $500 million in the second quarter.
“The difference with analysts’ expectations is all currency,” IBM chief financial offer Mark Loughridge said in a conference call. “Our operations performed right on target.”
The company raised its full year outlook for earnings per share to “at least $11.25” from $11.20.
“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,” IBM chairman, president and chief executive Samuel Palmisano said.
IBM said revenue from its Americas operations increased by three percent to $10.2 billion in the quarter while revenue dropped six percent in Europe, the Middle East and Africa to $7.4 billion.
Asia-Pacific revenue increased 9% to $5.4 billion.
“Europe should see improving trends and overall for the IBM corporation it should be the same,” Loughridge said.
IBM said it signed services contracts during the quarter totaling $12.3 billion a decrease of 12% over a year ago.
IBM shares shed 4% in after-hours electronic trading to $124.50 after gaining 1.37% during the day’s trading.
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First Published: Tue, Jul 20 2010. 09 46 AM IST
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