IBM President and CEO Arvind Krishna appears during a panel session at the World Economic Forum in Davos, Switzerland, on January 17, 2023.
Stefan Wermuth | Bloomberg | beautiful pictures
IBM reported second-quarter earnings on Wednesday, beating analysts’ estimates as the company expanded its gross margin. Revenue missed consensus estimates.
IBM shares fell less than 1% in extended trading following the report.
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Here’s how the company did it:
- income: $2.18, adjusted, versus $2.01 per share expected, according to Refinitiv.
- Revenue: $15.48 billion, compared with $15.58 billion expected, according to Refinitiv.
Net income for the quarter rose 13% to $1.6 billion from $1.4 billion, or $1.72 per share, a year earlier. IBM’s adjusted gross margin of 55.9% was higher than the Street Account estimate of 54.7%. Revenue was virtually unchanged from a year earlier.
IBM reiterated on Wednesday that it expects revenue growth of 3% to 5% through the year-end in constant currency. The company forecasts free cash flow of about $10.5 billion by 2023.
Intel’s largest division, its software business, reported revenue of $6.6 billion, up more than 7% from a year ago. Software includes products such as the Red Hat Linux operating system and security software.
The part of that division that grew the fastest was data and artificial intelligence products, up 10% from a year earlier.
In May, IBM invoicing WatsonX as a development studio for companies to “train, tune, and deploy” machine learning models, 15 months after the company sold the Watson Health unit.
CEO Arvind Krishna has mentioned the importance of AI several times in a prepared statement.
“We continue to meet the needs of our customers who are looking for reliable, enterprise AI solutions, and we are particularly excited about the response to the recently launched WatsonX AI platform. here,” said Krishna.
IBM’s consulting segment grew nearly 6% on a year-over-year basis to $5 billion in revenue.
The company’s infrastructure division, which includes mainframe sales, fell 14.6% to $3.6 billion in revenue. The drop was driven by lower revenue from its System Z servers, which fell 30%.
