GoKawiilIBM CEO Arvind Krishna appears at the World Economic Forum in Davos, Switzerland, on Jan. 16, 2024.
IBM shares fell as much as 5% in extended trading on Wednesday after the tech conglomerate issued second-quarter results that topped Wall Street projections.
Here's how the company did in comparison with LSEG consensus:
Earnings per share: $2.80 adjusted vs. $2.64 expected
$2.80 adjusted vs. $2.64 expected Revenue: $16.98 billion vs. $16.59 billion
IBM's revenue increased nearly 8% year over year in the quarter, according to a statement. Growth in the first quarter was below 1%. Net income, which includes costs related to acquisitions, rose to $2.19 billion, or $2.31 per share, from $1.83 billion, or $1.96 per share, a year ago.
Software revenue climbed about 10% to $7.39 billion, exceeding the $7.43 billion consensus among analysts surveyed by StreetAccount. Hybrid cloud revenue, including Red Hat, showed 16% growth. The software unit's gross margin of 83.9% was barely narrower than StreetAccount's 84.0% consensus.
Revenue from consulting rose almost 3% to $5.31 billion, higher than StreetAccount's $5.16 billion consensus. Infrastructure revenue went up 14% to $4.14 billion, above the $3.75 billion StreetAccount average estimate.
During the quarter, IBM announced the next-generation z17 mainframe computer and the acquisition of data and artificial intelligence consulting firm Hakkoda.
IBM called for over $13.5 billion in 2025 free cash flow, similar to a projection from April. The company still sees at least 5% revenue growth at constant currency for the year.
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