IBM (IBM) Tops Q2 EPS by 6c

IBM (NYSE: IBM) reported Q2 EPS of $3.84, $0.06 better than the analyst estimate of $3.78. Revenue for the quarter came in at $20.8 billion versus the consensus estimate of $20.95 billion.

Geographic Regions

The Americas’ second-quarter revenues were $9.8 billion, a decrease of 8 percent (down 2 percent adjusting for currency and the divested System x business) from the 2014 period. Revenues from Europe/Middle East/Africa were $6.6 billion, down 17 percent (up 1 percent adjusting for currency and the divested System x business). Asia-Pacific revenues decreased 19 percent (down 1 percent adjusting for currency and the divested System x business) to $4.3 billion. Revenues from the BRIC countries were down 35 percent as reported (down 18 percent adjusting for currency and the divested System x business). The BRIC performance had a negative two-point impact on IBM’s overall revenue growth rate, adjusting for currency and the divested System x business.

Services

Global Technology Services segment revenues were down 10 percent (up 1 percent adjusting for currency and the divested System x business) to $8.1 billion. Global Business Services segment revenues were down 12 percent (down 3 percent adjusting for currency) to $4.3 billion.

The estimated services backlog as of June 30 was $122 billion, up more than 1 percent year-to-year adjusting for currency.

Software

Revenues from the Software segment were down 10 percent to $5.8 billion (down 3 percent adjusting for currency) compared with the second quarter of 2014.

Revenues from IBM’s key middleware products, which include WebSphere, Information Management, Tivoli, Workforce Solutions and Rational products, were $4.0 billion, down 7 percent (flat adjusting for currency) year-to-year. Operating systems revenues of $0.4 billion were down 17 percent (down 9 percent adjusting for currency) year-to-year.

Hardware

Revenues from the Systems Hardware segment totaled $2.1 billion for the quarter, down 32 percent (up 5 percent adjusting for currency and the impact of the divested System x business) year-to-year.

Revenues from z Systems mainframe server products increased 9 percent compared with the year-ago period (up 15 percent adjusting for currency). Total delivery of z Systems computing power, as measured in MIPS (millions of instructions per second), increased 24 percent. Revenues from Power Systems were down 1 percent compared with the 2014 period (up 5 percent adjusting for currency). Revenues from System Storage decreased 10 percent (down 4 percent adjusting for currency).

Financing

Global Financing segment revenues decreased 5 percent (up 7 percent, adjusting for currency) in the second quarter at $0.5 billion.

IBM reaffirmed FY2015 guidance.

For earnings history and earnings-related data on IBM (IBM) click here.

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