IBM earnings up as revenue hit by currency changes

IBM has revealed that foreign currency fluctuations hit its bottom line in the second fiscal quarter

IBM has reported an 8% rise in net income for its second fiscal quarter, well ahead of analysts predictions, with Big Blue crediting its business model and growth initiatives as the cause of the strong performance.

But total revenues for the period were negatively impacted by currency to the tune of approximately $1billion and at $25.8 billion were down 3% compared to the same time last year.

“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,” said Ginni Rometty, IBM president and CEO.

 Commenting on the growth initiatives Mark Loughridge, IBM’s senior vice president and CFO said “Our business analytics portfolio of services and offerings were up 13 percent in the first half, led by our GBS consulting practice." 

"In Cloud, we doubled last year’s revenue, with contribution from all areas, private cloud, public cloud and our industry-based solutions. In the first half we had revenue growth of more than 20 percent in the Smarter Planet portfolio, driven by industry specific solutions and our Smarter Commerce and Smarter Cities offerings," he added.

With regard to the challenges faced this quarter Loughridge commented: “We had a strong second quarter last year, with 12 percent revenue growth, so we had a challenging compare. We are dealing with pretty significant currency dynamics, which impacted our revenue line by about $1 billion.”

“Looking ahead, we are well positioned to deliver greater value to a wider range of clients and to our shareholders,” concluded Rometty.

Read more on Business Intelligence Tools and Services