International Business Machines Corporation (IBM) reported Q2r earnings this week, reporting figures better than estimates, gaining on the strength of its cloud business division.
“It’s likely that we see that the economic recovery is looking to be longer and more protracted than we might have hoped for back in March,” stated Arvind Krishna on a conference call with analysts who replaced Ginni Rometty as CEO on April 6.
Key Highlights From The Earnings Release:
- Revenue of $18.12 billion, versus $17.72 billion expected.
- EPS of $2.18 per share was reported, versus $2.07 per share expected.
- The company generated a net income of $1.36 billion down by 46%.
- Gross Profit Margins was 48%, an increase from 45.1% in the first quarter and 47% in the year-ago quarter.
- Revenue from IBM’s Global Technology Services unit totaled $6.32 billion, down almost 8% year over year.
- IBM’s Cloud and Cognitive Software segment, which includes Red Hat, generated $5.75 billion in revenue, an increase of 3%.
- Red Hat revenue was $1.09 billion on a normalized basis.
- Red Hat’s growth rate dropped by 18% in the first quarter.
- The Global Business Services unit reported $3.89 billion in revenue, down by 7% but higher than estimates of $3.87 billion.
- The quarter witnessed weakness from smaller customers, informed Jim Kavanaugh, IBM’s chief financial officer.
- IBM did not update its full-year guidance.
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