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IBM (IBM) Beats Q2 Views on Top and Bottom Led by Americas, Systems

July 18, 2011 4:27 PM EDT
IBM (NYSE: IBM) shares are higher in after-hours trading following better than expected second-quarter earnings results and a raised profit outlook from the Armonk, NY-based tech giant.

Revenue in the quarter increased 12 percent to $26.7 billion. Adjusting for currency, revs popped just 5 percent from Q210. The number came in ahead of the $25.35 billion average sought by the Street.

Net income rose 8.2 percent to $3.664 billion, or $3.04 per common share. Adjusting for acquisition and retirement-related costs, and earnings were a more robust $3.09 per share, topping views calling for $3.03.

Adjusted for currency, software revenues rose 10 percent, Systems and Technology saw a 12 percent jump in revenues, and Service revenues increased just 2 percent.

The company's services backlog was reported at $144 billion, up $15 billion.

"In the second quarter our long-term strategic investments in the company's growth initiatives again helped drive strong revenue performance," said CEO Sam Palmisano. "Hardware, software and services revenue grew at double digits, and we achieved strong profit and free cash flow growth.

Americas led growth, adjusted revs rising 8 percent to $11.2 billion in the quarter. Europe/Middle East/Africa (EMEA) and Asia/Pacific both saw a 3 percent increase. Revenues from the company’s growth markets increased 13 percent on an adjusted basis.

IBM ended the second-quarter 2011 with $11.8 billion of cash on hand and generated free cash flow of $3.4 billion.

Looking ahead, IBM boosted its fiscal 2011 earnings outlook from at least $13.15 to at least $13.25 per share, stronger than $13.22 expected by the Street.

After an initial reaction, IBM is up 2.5 percent.


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