IBM closes solid Q2, posts revenue growth

IBM's revenue increased 10 per cent year-over-year in its most recent quarter, the company said Wednesday, in a report that spotlighted growth in the company's services and software units but showed continuing softness in several of its hardware divisions.

For the second quarter in a row, IBM missed analysts' earnings per share estimates by a penny. IBM posted net income of US$1.7 billion, or $0.97 per share, for its second fiscal quarter, ended June 30. The consensus estimate of analysts polled by Thomson First Call called for $0.98 in per share earnings.

IBM edged past Thomson First Call's consensus revenue estimate, however, with $21.6 billion, topping the $21.4 billion forecast by analysts.

IBM's Global Services group accounted for nearly half of the company's revenue for the quarter, bringing in $10.6 billion, a 23 percent increase over 2002's $8.7 billion second-quarter total. The addition of PwC Consulting, bought by IBM late last year, helped drive the growth, IBM said.

Revenue from IBM's software unit rose to $3.5 billion, up 6 percent from last year's $3.3 billion. Revenue from IBM's WebSphere middleware line grew 14 percent, and its DB2 database revenue increased 16 percent. Revenue from IBM's Lotus information management and collaboration software unit declined 3 percent year-over-year.

IBM's total hardware revenue declined 1 percent, to $6.6 billion, although some areas showed gains: IBM's Systems Group revenue from servers and storage systems increased 10 percent. The company's Personal Systems group revenue dropped 3 percent, as PC sales continued their down trend.

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