ARMONK (dpa-AFX) - International Business Machines Corp. (IBM) said Thursday after the markets closed that its second quarter profit rose 28% from last year, when results were weighed down by a $1 billion workforce rebalancing charge.
The company's quarterly earnings per share, excluding items, came in above analysts' expectations as did its quarterly revenue. At the same time, the company reiterated its full year 2014 earnings outlook.
'In the second quarter, we made further progress on our transformation. We performed well in our strategic imperatives around cloud, big data and analytics, security and mobile,' said Ginni Rometty, IBM chairman, president and chief executive officer.
IBM shares are currently losing 1.24% in after hours trading after closing the day's regular trading session at $192.49, up 13 cents. The shares trade in a 52-week range of $172.19 to $200.94.
For the second quarter, Americas revenues fell 1% from last year to $10.6 billion and Asia-Pacific revenues slipped 9% to $5.3 billion, while Europe/Middle East/Africa revenues grew 1% to $7.9 billion. OEM revenues for the quarter dropped 19% from last year to $433 million.
Revenues from the company's growth markets fell 7% in the second quarter. Revenues in the so-called BRIC countries -- Brazil, Russia, India and China - dropped 2%.
The company's global technology services segment reported second quarter revenue of $9.4 billion, down 1% from a year earlier. Global business services segment's revenue for the quarter fell 2% year-over-year to $4.5 billion. IBM is the world's biggest computer services firm.
The estimated services backlog at the end of the second quarter was $136 billion, down 3% adjusting for currency.
IBM's software revenue for the second quarter rose 1% year-over-year to $6.5 billion.
Second quarter revenues from the company's Systems and Technology segment dropped 11% year-over-year to $3.3 billion, with revenues from System z mainframe server products down 1%. IBM is the world's biggest server maker.
In January, China's Lenovo Group Ltd., the world's largest PC maker, agreed to buy IBM's x86 server business for about $2.3 billion in a cash and stock deal.
For the second quarter ended June 30, 2014, the Armonk, New York-based technology giant reported net income of $4.1 billion or $24.12 per share, compared to $3.2 billion or $2.91 per share for the year-ago quarter.
Excluding items, operating earnings for the second quarter were $4.3 billion or $4.32 per share, compared to $3.6 billion or $3.22 per share in the prior year quarter.
On average, 19 analysts polled by Thomson Reuters expected the company to earn $4.29 per share for the second quarter. Analysts' estimates typically exclude special items.
Gross margin for the quarter improved to 49.1% from 48.7% a year ago on a reported basis, and improved to 49.8% from 49.7% last year on an adjusted basis.
Big Blue's total revenues for the second quarter fell 2% to $24.36 billion from $24.92 billion in the same quarter last year. Nineteen analysts had a consensus revenue estimate of $24.13 billion for the second quarter.
IBM has been acquiring small companies to drive growth and expand product offerings. The company has plans to make $20 billion worth of acquisitions by 2015. During the second quarter, IBM completed the acquisition of Silverpop, a privately held software company based in Atlanta, Georgia. Financial terms of the deal were not disclosed.
For the full year 2014, the company continues to forecast earnings of at least $17.00 per share and operating earnings of at least $18.00 per share. Analysts currently expect the company to earn $17.87 per share for the full year 2014.
In a departure from their erstwhile rivalry in the PC space, IBM and Apple Inc (AAPL) on Tuesday agreed to cooperate in the mobile arena; envisaging creation of a new class of business apps as well as sales of iPhones and iPads to IBM's corporate customers. The deal is part of efforts by Apple to broaden sales of its iconic devices beyond the realm of lay-consumers; while IBM, traditionally focused on making chips for PCs, seeks to expand its business software into the mobile devices arena.
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