IBM posts healthy Q2 earnings

IBM yesterday posted strong earnings in its second quarter financial report, showing earnings of $US1.7 billion, compared with $1.5 billion in the second quarter last year.

Revenues for the quarter, ending June 30, rose 16 per cent to $US21.9 billion from $18.8 billion.

Earnings per share totaled 91 cents, up from 75 cents in the second quarter last year, a showing that beat Wall Street estimates.

The results do not include a one-time after-tax benefit of about $700 million, or .37 cents per share, resulting from IBM's closing the sale of its Global Network in several geographic areas, changes to the company's microelectronics and storage businesses and an accounting change that shortens the depreciable lives of PCs used within the company from 3 to 5 years, the company said in a statement.

Including the one-time benefit, IBM's earnings were $2.4 billion, or $1.28 per share.

Louis Gerstner, IBM chairman and chief executive officer, attributed the strong results to increased sales of the company's services and software, particularly its database, transaction processing and Tivoli products.

Revenue in the Americas totaled $10 billion, up 16 percent from the same period last year. Europe, the Middle East and Africa revenues totaled $6.4 billion, up 14 percent. Asia-Pacific revenues reached $3.6 billion, up 19 per cent. Original equipment manufacturer (OEM) revenues were $1.9 billion, a 21 per cent increase.

Hardware revenues were $9.4 billion, up 22 per cent from the same quarter last year. IBM Global Services grew 15 per cent from the same period last year to $8 billion. Software revenues were $3.1 billion, up 9 per cent.

IBM shares on the Nasdaq stock exchange closed today at $134.60, up 1.6 for a 1.19 percent increase.

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