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UPDATE:Sales languished at technology giant International Business Machines during the second quarter, falling 3 per cent to $25.78 billion.
Analysts polled by Bloomberg had forecast sales of at least $26.3 billion, some $500 million above revenues tallied during the three months ending June 30.
However, the company beat, as expected, on its bottom line results. IBM reported operating income of $4.1 billion, or $3.51 per share.
This is the 38th consecutive quarter of year-on-year earnings growth at the Armonk, N.Y., based firm.
Weighing on results was IBM’s hardware division, which saw sales decline 7 per cent, while software revenue edged up 4 per cent.
The company’s service backlog was flat when adjusting for currency, at $136 billion.
“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,” IBM’s Chief Executive Ginni Rometty said.
Regionally, IBM recorded sales of $11.1 billion in the Americas, $7.9 billion in Europe and $6.3 billion in Asia. Both the Americas and Asia-Pacific saw some improvement during the period, while Europe was in line with last year’s figures.
Growth markets logged an 8 per cent sales increase, as more than 30 countries recorded double-digit sales growth. Sales to Brazil, Russia, India and China advanced 12 per cent.
IBM also boosted its full year earnings expectations for the year, up a dime to $15.10.
Shares are up nearly 2 per cent in after-hours trade.
Technology giant International Business Machines will report second quarter results after U.S. markets close at 4 p.m. today, offering a clear gauge of business ability to fund technology investments.
Wall Street forecasts the firm will post earnings per share of $3.43 on sales of $26.3 billion.
The Armonk, N.Y., based company has a long track record of topping earnings expectations, making revenue all the more important during the period.
Deutsche Bank’s Chris Whitmore expects the firm to report roughly in line bottom line results, as sales remain weak.
“We believe lengthening sales cycles, a weak close in June and a demand pause in hardware ahead of upcoming new product cycles combined with large Euro exposure … will translate into a revenue miss,” he says. “In the quarter, we expect soft Hardware and Software results.”
The company’s results follow Intel’s earlier this week, when the chip maker lowered its full year forecasts on sluggish sales in developed markets.
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