Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

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

Index Last Change % Change
Dow 15,914.74 -99.64 -0.62%
Nasdaq 4,283.59 14.83 0.35%
S&P 500 1,851.86 -0.35 -0.02%
Treasuries 1.70 -0.02 -1.39%
Data as of 12:50am ET
Company Price Change % Change
Bank of America Corp... 11.98 -0.22 -1.80%
Facebook Inc 101.00 1.46 1.47%
Pfizer Inc 29.49 0.39 1.34%
Apple Inc 94.27 -0.72 -0.76%
Microsoft Corp 49.71 0.43 0.87%
Data as of Feb 10
Sponsors

Sections

Tesla CEO Elon Musk issued an earnings update and shareholder letter Wednesday that confirmed 2016 delivery guidance and promised profits ahead. More

The Fed Chair was criticized on a range of issues, from China and monetary policy to black unemployment and the strong dollar. More

Twitter's stock is sinking fast after the company reported that it lost customers in the fourth quarter of 2015. More

STEM3 Academy was started specifically for students with autism, ADHD and Asperger's Syndrome. Its STEM-based curriculum is breaking through barriers. More

The average price for domestic airfare dropped in the third quarter of 2015, and travel experts expect the trend to continue in 2016. More