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Cade Metz, senior writer of Wired, and Arvind Krishna, CEO of IBM, then senior vice president and director of IBM Research, speak on stage at the Wired Business Conference in New York on June 16, 2016.
Brian Ach | Wired | Getty Images
IBM shares rose 4% in extended trading on Monday after the provider of technology and enterprise services reported second-quarter profits above analysts’ expectations.
Here’s how the company did it:
- Earnings: $ 2.33 per share, adjusted, compared to $ 2.29 per share as expected by analysts, according to Refinitiv.
- Returned: $ 18.75 billion, compared to $ 18.29 billion as expected by analysts, according to Refinitiv.
Revenue grew 3% year-over-year in the quarter, according to a statement, the fastest growth in three years, as the company wraps up a quarter that saw a significant impact from the coronavirus. In the previous quarter, sales increased by 0.9%. The company reiterated its expectations that revenues will increase rather than decrease throughout the year.
IBM’s Global Technology Services segment, which includes managed services, outsourcing and support, generated revenue of $ 6.34 billion. It was up slightly and above the consensus of $ 6.23 billion among analysts polled by FactSet.
The Cloud & Cognitive Software business, which includes Red Hat, generated revenue of $ 6.10 billion, up 6% and more than the FactSet consensus of $ 5.93 billion.
The company’s Global Business Services consultancy unit reported revenue of $ 4.34 billion, up nearly 12% and above the FactSet consensus of $ 4.03 billion.
Systems revenue, including hardware, was $ 1.71 billion, down 7%, according to consensus.
During the quarter, IBM spent $ 1.75 billion on acquisitions, the highest amount in a single quarter since closing the $ 34 billion deal with Red Hat in the third quarter of 2019. It announced the ‘acquisition of process extraction software company myInvenio, application management company Turbonomic Sales force consulting company Waeg. The company also announced 2-nanometer chip technology, as well as new artificial intelligence features for its Watson Studio software for building models.
Excluding after-hours movement, IBM stocks are up 9% year-to-date, while the S&P 500 index is up nearly 13% over the same period.
Executives will discuss the results on a conference call with analysts starting at 5 p.m. EST.
This is last minute news. Please check for updates.
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