IBM beats 12% and raises full-year outlook despite lower revenue
IBM raises full-year outlook despite lower revenue
NEW YORK (Reuters) - IBM (NYSE:IBM - News) reported a 13 percent fall in revenue amid a decline in corporate spending, but cost cuts and a shift to more profitable businesses helped it achieve higher-than-expected earnings, and the company raised its outlook for the full year.
International Business Machines Corp said it now expects full-year earnings of "at least $9.70" per share, up from its previous outlook of $9.20, helping its shares rise 3 percent in after-hours trading on Thursday.
IBM's second-quarter revenue fell to $23.3 billion from $26.8 billion a year earlier. That was slightly lower than analysts' average forecast of $23.5 billion, according to Reuters Estimates.
But net profit for the quarter rose to $3.1 billion from $2.8 billion in the year-ago quarter.
Profit per share rose to $2.32 from $1.97, much higher than the average Wall Street forecast of $2.01 per share, according to Reuters Estimates.
IBM has fared better than many other technology companies amid the recent economic downturn, helped by its growing focus on profitable software and services like outsourcing and technology support rather than increasingly commoditized hardware.
Its gross profit margin rose to 45.5 percent from 43.2 percent a year earlier, it said.
IBM reports earnings rise 12%
SAN FRANCISCO (MarketWatch) -- IBM Corp. /quotes/comstock/13*!ibm/quotes/nls/ibm (IBM 112.64, +2.00, +1.81%) on Thursday reported a second-quarter profit of $3.1 billion, or $2.32 a share, on revenue of $23.3 billion. Analysts surveyed by FactSet Research had forecast IBM to earn $2.01 a share on $23.56 billion in sales. During the same period a year ago, IBM earned $2.8 billion, or $1.97 a share, on revenue of $26.8 billion. IBM also raised its full-year earnings forecast to at least $9.70 a share from $9.20 a share.
IBM shares jump ahead of results, focus on outlook
NEW YORK (Reuters) - Shares in IBM rose 2.5 percent in afternoon trade, leading the market higher ahead of the company's quarterly results, as investors bet on the possibility of an improved full-year forecast.
Analysts, on average, expect International Business Machines Corp (NYSE:IBM - News) to report later on Thursday a 12 percent drop in second-quarter revenue to $23.5 billion, according to Reuters Estimates.
But earnings per share are expected to rise slightly to $2.01, helped by a shift to more profitable businesses and by cost cuts. as well as by a lower number of shares.
William Lefkowitz, options strategist at vFinance Investments, said the whisper number was much higher, around $2.20 per share to $2.30 per share.
Analysts also said they were focusing on the possibility of a higher outlook from IBM. The company's previous outlook was for full-year earnings of "at least $9.20" per share -- a target many said looked easily achievable due to a stabilizing economy.
Bernstein Research analyst Toni Sacconaghi said IBM may raise its outlook to reflect a solid first half of the year, "perhaps to 'at least $9.30'."
IBM has fared better than many other technology companies, helped in part by its growing focus on profitable software and services like outsourcing and technology support.
"EPS is likely to see upward revisions as the year progresses, and the strong defensiveness of IBM's portfolio makes it attractive in an uncertain spending environment," Sacconaghi said in a research report earlier this week.
IBM shares rose $2.74, or 2.6 percent, to $109.96 in afternoon trade.
IBM raises guidance, profit blows past forecasts; sales fall short
SAN FRANCISCO (AP) -- IBM Corp. has dramatically increased its full-year profit forecast to $9.70 per share.
The forecast had been $9.20 per share before Thursday.
The upgrade is a rare sign of confidence from a major corporation in the recession. IBM believes it can continue wringing out more profit from its services and software divisions, even as sales suffer.
The technology company said it had a second-quarter profit of $3.1 billion, or $2.32 per share. That was up 12 percent over last year and well ahead of analysts' projections for $2.02 per share.
Sales fell 13 percent to $23.25 billion. Analysts expected $23.59 billion.
