Higher U.S. Dollar Costs IBM (IBM) $1 Billion in Revenue in Q2, But EPS Tops Views

July 18, 2012 5:09 PM EDT
Shares of IBM (NYSE: IBM) are trading higher in after-hours trading on Wednesday following second quarter results.

The computer giant reported earnings that were 9c better than analyst estimates, $3.51 vs. $3.42 expected. Revenue missed expectations, coming in at $25.8 billion compared to $26.28 billion expected. Total revenues for the second quarter of 2012 were 3 percent lower than the second quarter of 2011. Adjusted for a $1 billion currency cost, revenues were higher by 1 percent compared to 2011.

Non-GAAP earnings of $3.51 per share for the second quarter of 2012 compares to 2011 non-GAAP earnings of $3.09 per share, an increase of 14 percent.

Full year 2012 guidance was higher than the consensus estimate of $15.06, and the company said should be higher than $15.10 for the year.

"In the second quarter, we delivered strong profit, earnings per share and free cash flow growth. This performance reflects continued strength in our growth initiatives and investments in higher value opportunities,” said Ginni Rometty, IBM president and chief executive officer. "These are fundamental elements of our long-term business model.

"Looking ahead, we are well positioned to deliver greater value to a wider range of clients and to our shareholders. Given our performance in the first half and our outlook for the second half, we are raising our full-year operating earnings per share expectations to at least $15.10."

Shares of IBM last traded at $199.90, up 1.94 percent from the close.

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