IBM Earnings Cheat Sheet: Rising Revenue Helps Margins Expand, Profit Rises

S&P 500 (NYSE:SPY) component International Business Machines Corporation (NYSE:IBM) reported its results for the second quarter. International Business Machines Corp. creates integrated solutions that leverage information technology and a deep knowledge of business processes for clients.

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International Business Machines Earnings Cheat Sheet for the Second Quarter

Results: Net income for the diversified computer systems company rose to $3.66 billion ($3 per share) vs. $3.39 billion ($2.61 per share) in the same quarter a year earlier. This marks a rise of 8.2% from the year earlier quarter.

Revenue: Rose 12.4% to $26.67 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: IBM reported adjusted net income of $3.09 per share. By that measure, the company beat the mean estimate of $3.01 per share. It beat the average revenue estimate of $25.35 billion.

Quoting Management: “In the second quarter our long-term strategic investments in the company’s growth initiatives again helped drive strong revenue performance,” said Samuel J. Palmisano, IBM chairman, president and chief executive officer. “Hardware, software and services revenue grew at double digits, and we achieved strong profit and free cash flow growth.”

Key Stats:

The company has now seen net income rise in three straight quarters. In the first quarter, net income rose 10.1% and in the fourth quarter of the last fiscal year, the figure rose 9.2%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 2 cents in the first quarter, by 10 cents in the fourth quarter of the last fiscal year, and by 7 cents in the third quarter of the last fiscal year.

Revenue has risen the past four quarters. Revenue increased 10.3% to $24.61 billion in the first quarter. The figure rose 6.6% in the fourth quarter of the last fiscal year from the year earlier and climbed 3% in the third quarter of the last fiscal year from the year-ago quarter.

Gross margins grew 0.9 percentage point to 46.4%. The growth seemed to be driven by increased revenue, as the figure rose 12.4% from the year earlier quarter while costs rose 10.6%.

Competitors to Watch: Oracle Corporation (NASDAQ:ORCL), Hewlett-Packard Company (NYSE:HPQ), Microsoft Corporation (NASDAQ:MSFT), Cisco Systems, Inc. (NASDAQ:CSCO), Intel Corporation (NASDAQ:INTC), Dell Inc. (NASDAQ:DELL), Apple Inc. (NASDAQ:AAPL), EMC Corporation (NYSE:EMC), SAP AG (NYSE:SAP), and Sybase, Inc. (SY).

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(Source: Xignite Financials)

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