IBM says profit, revenue fell but raises expectations for year

Software was a bright spot as hardware and services revenue declined in the second quarter

IBM's Q2 2013 results included losses in revenue and profit

IBM's Q2 2013 results included losses in revenue and profit

A rebound for IBM failed to materialise in the second quarter, as profit and sales declined along with a slump in revenue from hardware and services.

However, in its quarterly financial report, the company raised its forecast for earnings per share, excluding restructuring charges, for the year.

Second-quarter net income declined 17 per cent from the year-earlier period to $US3.2 billion, while revenue declined by 3 per cent to $US24.9 billion. Adjusting for currency fluctuations, revenue was down 1 percent.

Revenue was under the forecast of $25.37 billion from analysts polled by Thomson Reuters. However, operating earnings per share, excluding restructuring charges, was $US3.91, above the analyst forecast of $US3.77.

IBM raised its full-year earnings forecast to $US16.90 a share, up from $US16.70 previously. The numbers exclude restructuring and other charges.

The decline in both profit and revenue was worse than last quarter, when IBM reported a 5 per cent decline in revenue to $US23.4 billion and a 1 per cent drop on net income to $US3 billion.

But traders, apparently pleased by IBM earnings-per-share numbers, boosted company shares in after-hours trading to $US194.55, up by $US0.70 from the day's closing number.

IBM is generally considered a bellwether for the tech industry due to its global reach and broad portfolio of software, hardware and services. What's more, in a sign of the company's importance as an indicator for markets in general, it is the most heavily weighted stock on the Dow Jones Industrial Average index.

Though services and overall hardware sales dropped during the second quarter, company officials stressed strength in software and big systems.

"In the second quarter, we delivered strong performance in our higher-value software and mainframe businesses," said Ginni Rometty, IBM chairman, president and chief executive officer. Rometty said she expects improvement in the last half of the year, partly as a result of restructuring efforts that include acquisitions, sales of nonstrategic businesses and "skills rebalancing."

Software sales totaled $US6.4 billion, an increase of 4 per cent year over year. Middleware, including WebSphere, information management, Tivoli and Social Workforce Solutions (formerly Lotus), generated $US4.3 billion in revenue, up 9 per cent.

The company's key Global Technology Services segment, however, suffered a 5 per cent decline in revenue to $US9.5 billion.

Revenue for the Systems and Technology unit, which includes hardware products, was $3.8 billion, down 12 per cent.

Revenue for major geographic segments of the company's business were flat or in decline during the quarter. Revenue for the Americas was $US10.7 billion, a decrease of 3 per cent; revenue from the Europe/Middle East/Africa area was flat at $US7.8 billion; and Asia-Pacific revenue decreased 8 per cent to $US5.8 billion.

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags business issuesservicesIBMhardware systemssoftwarefinancial results

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Marc Ferranti

IDG News Service
Show Comments

Essentials

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?