IBM Research Senior Vice President and Director Arvind Krishna speaks onstage during the 2016 Cable Business Conference in New York on June 16, 2016.
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IBM shares rose more than 6% in extended trading on Monday after the company reported second-quarter earnings that were better than analysts had expected.
This is how the company did it:
- Profits: $ 2.18 per share, adjusted, versus $ 2.07 per share as expected by analysts, according to Refinitiv.
- Income: $ 18.12 billion, compared to $ 17.72 billion as expected by analysts, according to Refinitiv.
Adjusted earnings per share fell 31% annually in the quarter, and revenue decreased 5%, according to a statement. It is the company’s second consecutive quarter of declining revenue when the coronavirus hits the company’s bottom line.
The company’s net income, which reached $ 1.36 billion, was down 46%. However, the company improved gross margins in three of its five units, in part thanks to job cuts. IBM’s total gross profit margin was 48%, up from 45.1% in the first quarter and up from 47% in the prior year quarter.
IBM did not update its year-round guide. In April, IBM withdrew its year-round guidance due to the pandemic.
Revenue from IBM’s Global Technology Services category totaled $ 6.32 billion, nearly 8% year-over-year and above the FactSet consensus of $ 6.24 billion.
IBM’s cloud and cognitive software segment, which includes Red Hat, produced $ 5.75 billion in revenue. That represents an increase of 3% and just above the FactSet consensus of $ 5.74 billion.
The Global Business Services unit had revenues of $ 3.89 billion, representing a decrease of 7% and slightly more than the consensus of $ 3.87 billion.
In the quarter, IBM announced cloud businesses from Movius and Prysmian Group, and told the News & Observer newspaper in North Carolina that it was cutting several employees. And Arvind Krishna started his job as IBM CEO on April 6.
Executives will discuss the results with analysts in a conference call that will begin at 5 pm ET.
Excluding out-of-hours movement, IBM shares have fallen 5% year-to-date.
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