IBM gets boost from new businesses, tops estimates

By Pushkala Aripaka (Reuters) - International Business Machines Corp on Wednesday reported second-quarter profit and revenue that topped analysts' expectations as it benefited from growth in higher-margin businesses including cybersecurity and cloud computing. Under Chief Executive Officer Ginni Rometty, IBM has been focusing on an array of new technologies ranging from artificial intelligence to cloud computing as it tries to offset weakness in its legacy business of selling hardware and software. The newer businesses, which are spread across its various divisions, have been bundled into what the company calls 'strategic imperatives'.

Reuters July 19, 2018 05:05:06 IST
IBM gets boost from new businesses, tops estimates

IBM gets boost from new businesses tops estimates

By Pushkala Aripaka

(Reuters) - International Business Machines Corp on Wednesday reported second-quarter profit and revenue that topped analysts' expectations as it benefited from growth in higher-margin businesses including cybersecurity and cloud computing.

Under Chief Executive Officer Ginni Rometty, IBM has been focusing on an array of new technologies ranging from artificial intelligence to cloud computing as it tries to offset weakness in its legacy business of selling hardware and software.

The newer businesses, which are spread across its various divisions, have been bundled into what the company calls "strategic imperatives".

Revenue from these businesses grew 15 percent to $10.1 billion in the second quarter, accounting for more than half of the company's total revenue.

IBM Chief Financial Officer James Kavanaugh said the company's investments to reposition itself have been paying off.

"We accelerated our growth, really capitalizing on these emerging high value areas," Kavanaugh told Reuters.

Overall revenue rose nearly 4 percent to $20 billion, beating analysts' average estimate of $19.85 billion, according to Thomson Reuters I/B/E/S.

The company's revenue has now risen for three straight quarters after falling for nearly six years.

Operating gross profit margin in the quarter slipped to 46.5 percent from 47.1 percent.

"One of the key components was as-a-service growth ... and as that scales through, you're starting to see margin expansion shine. Gross margin closed the gap," CFRA Research analyst David Holt said.

Net income rose to $2.4 billion, or $2.61 per share, in the quarter ended June 30 from $2.33 billion, or $2.48 per share, a year earlier.

Excluding items, IBM earned $3.08 per share, beating analysts' average expectation of $3.04 per share.

Shares of the Armonk, New York-based company rose about 2.5 percent to $148.13 in trading after the bell.

(Reporting by Pushkala Aripaka and Remya Padmadas in Bengaluru; Editing by Anil D'Silva)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Oil rises 2% as OPEC complies with production cuts
Business

Oil rises 2% as OPEC complies with production cuts

By Jessica Resnick-Ault NEW YORK (Reuters) - Oil prices strengthened on Wednesday, as OPEC and its allies were seen complying with a pact to cut oil supply in September, even as concerns loomed that recovery in fuel demand will be stalled by soaring global coronavirus cases. Early in the day crude was boosted by a bullish stock market. Even as equities whipsawed on pandemic worries, oil stayed higher, buoyed by expectations that OPEC could staunch a supply glut

Tesla's back-to-back price cuts bring sticker on U.S. Model S below $70,000
Business

Tesla's back-to-back price cuts bring sticker on U.S. Model S below $70,000

By Tina Bellon and C Nivedita (Reuters) - Tesla Inc will further cut the price of its Model S "Long Range" sedan in the United States to $69,420, the electric carmaker's chief executive, Elon Musk, announced in a tweet https://bit.ly/2H0JCP0 on Wednesday. The anticipated drop marks the second time this week Tesla has cut the price for the high-end sedan, following a 4% cut of the Model S's price in the United States on Tuesday to $71,990.

Trump cites teenaged son's bout with coronavirus in calling for schools to reopen
World

Trump cites teenaged son's bout with coronavirus in calling for schools to reopen

By Jeff Mason DES MOINES, Iowa (Reuters) - Under siege over his handling of the novel coronavirus pandemic, President Donald Trump on Wednesday cited what he said was his son's mild bout of the virus as a reason why American schools should reopen as soon as possible. Trump made the comment about his son, Barron, as the president swept into Iowa on a mission to shore up support in battleground states that he won in 2016 but is in danger of losing to Democrat Joe Biden barely three weeks before the election. First lady Melania Trump announced in a statement earlier in the day that the virus that struck both her and her husband had also infected their 14-year-old son