IBM profit jumps, but sales fall short

By Julianne Pepitone, staff reporter


NEW YORK (CNNMoney.com) -- IBM posted second-quarter earnings Monday that beat estimates, but its revenue fell short of forecasts.

The tech giant said its net income for the second quarter rose 13% from last year to $2.61 per share, beating expectations. Net income for the quarter was $3.4 billion, up 9% from last year.

Analysts polled by Thomson Reuters expected earnings to be $2.58 per share.

Sales for the Armonk, N.Y., company rose 2% to $23.7 billion, which missed analysts' forecast of $24.17 billion.

IBM, which is a component of the blue-chip Dow index, is the world's largest IT company. Wall Street looks to Big Blue's earnings as an indicator of how much businesses are spending on technology.

The traditionally insulated tech sector has not been immune to the global recession, but experts have been looking for tech firms' earnings to start improving on rebounding demand from business customers.

But Mark Loughridge, IBM's chief financial officer, protested when an analyst suggested that IBM's results imply that IT demand lagging.

"I wouldn't take this as a pullback in spending," Loughridge said on a conference call following IBM's earnings report. "We saw a lot of strength in sectors like software, which had a very strong third month of the quarter."

Monday's report marked the first time in a year that IBM missed revenue estimates. But the company has fallen short of analysts' revenue forecasts for four out of the last eight quarters.

IBM raised its full-year earnings guidance to $11.25 a share, but that too was below analyst expectations.

Shares of IBM (IBM, Fortune 500) fell 4% in after-hours trading. To top of page

Just the hot list include
Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 24,580.89 119.19 0.49%
Nasdaq 7,692.82 -20.14 -0.26%
S&P 500 2,754.88 5.12 0.19%
Treasuries 2.90 0.00 0.00%
Data as of 8:04am ET
Company Price Change % Change
Morgan Stanley 48.89 0.00 0.00%
DowDuPont Inc 67.00 0.00 0.00%
PG&E Corp 42.92 0.00 0.00%
Kinder Morgan Inc 17.39 0.00 0.00%
Williams Companies I... 27.64 0.00 0.00%
Data as of Jun 22
Sponsors

Sections

One of the world's leading smartphone makers is aiming for the biggest stock market listing in nearly two years. More

If Trump puts tariffs on European cars, it would hurt automakers who build a lot of cars in the United States. More

The US is set to announce measures this week taking aim at Chinese investment in key American technologies amid an emerging trade war between the two countries. More