Declining Revenues Aren’t Enough to Hold IBM Back in Q2
IBM reported Monday after the markets closed that posted $2.18 in earnings per share (EPS) and $18.1 billion in revenue in the second quarter versus analysts' calls for $2.07 in EPS and $17.72 billion in revenue.
International Business Machines Corp. (NYSE: IBM | IBM Price Prediction) reported second-quarter financial results after markets closed Monday. The company said that it had $2.18 in earnings per share (EPS) and $18.1 billion in revenue, versus analysts’ calls for $2.07 in EPS and $17.72 billion in revenue. The same period from last year had $3.17 in EPS and $19.16 billion in revenue.
In terms of its segments, the company reported:
- Cloud & Cognitive Software revenues increased 3% to $5.7 billion, up 5% in constant currency. Cloud & Data Platforms increased by 29% led by Red Hat.
- Global Business Services revenues decreased 7% to $3.9 billion, or 6% in constant currency.
- Global Technology Services revenues decreased 8% to $6.3 billion, or down 5% in constant currency.
- Systems revenues increased 6% to $1.9 billion.
- Global Financing revenues decreased 25% to $265 million, down 23% in constant currency.
In the second quarter, the company generated net cash from operating activities of $3.6 billion, free cash flow was $2.3 billion. The company returned $1.5 billion to shareholders in dividends.
On the books, the company ended the quarter with $14.3 billion in cash, cash equivalents, and marketable securities, an increase of $5.2 billion from the end of 2019.
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IBM previously pulled guidance last quarter due to coronavirus uncertainty. The company also neglected to introduce any new guidance or comment on the way forward regarding COVID-19. However, analysts are calling for $11.12 in EPS and $73.33 billion in revenue for the full year.
IBM stock closed Monday at $126.35, with a 52-week range of $90.56 to $158.75. The consensus analyst price target is $126.81. Following the release, the stock was last seen up about 5% at $132.50 in the after-hours session.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
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