IBM Posts Upbeat Q2 Earnings, But Revenue Misses Views

reported better-than-expected earnings for its second quarter, but the company's revenue missed analysts' estimates. The Armonk, New York-based company posted quarterly consolidated net income of $3.45 billion, or $3.50 per share, compared to $4.14 billion, $4.12 per share, in the year-ago period. Excluding items, the company's operating earnings from continuing operations declined 13 percent to $3.84 per share from $4.43 per share. Its total revenue declined 13.5 percent year-over-year to $20.81 billion. However, analysts were expecting earnings of $3.78 per share on revenue of $20.95 billion. The average estimate among 124 Estimize users was for earnings of $3.80 per share and revenue of $21.01 billion. The Americas' revenue fell 8 percent year-over-year to $9.8 billion in the second quarter, while revenue from Europe/Middle East/Africa dropped 17 percent to $6.6 billion. Asia-Pacific revenue tumbled 19 percent to $4.3 billion, while revenue from the BRIC countries slipped 35 percent in the latest quarter. Global Technology Services segment revenue declined 10 percent to $8.1 billion, while Global Business Services segment revenue dropped 12 percent to $4.3 billion. Global Financing segment revenue fell 5 percent in the latest quarter to $0.5 billion. Revenue from the Software segment fell 10 percent year-over-year to $5.8 billion in the recent quarter, while revenue from the Systems Hardware segment dipped 32 percent to $2.1 billion for the quarter. Its gross profit margin from continuing operations narrowed to 49.9 percent in the second quarter, from 50.1 percent in the year-ago quarter. "Our results for the first half of 2015 demonstrate that we continue to transform our business to higher value and return value to shareholders. We expanded margins, continued to innovate across our portfolio and delivered strong growth in our strategic imperatives of cloud, analytics and engagement, which are becoming a significant part of our business," said Ginni Rometty, IBM chairman, president and chief executive officer. IBM projects full-year 2015 operating earnings of $15.75 to $16.50 per share. The company also projects a modest increase in free cash flow for the year. IBM shares fell 3.59 percent to $167.00 in the after-hours trading session.