IDG News Service - Software and services fueled IBM growth in the second quarter of 2011, the company said Monday.
For the quarter ended June 30, IBM reported revenue of $26.7 billion, which is up 12 percent from the same quarter last year. GAAP net income was $3.7 billion, up 8 percent. It reported non-GAAP net income of $3.8 billion, an 11 percent increase from the year before. Earnings per share were $3.00 by GAAP estimates, and $3.09 by non-GAAP accounting.
Overall, both software and systems grew by 17 percent, according to the company. Revenue from software provided $6.2 billion. IBM's key middleware products alone, such as WebSphere, Tivoli, Lotus and Rational, brought in $3.9 billion, a jump of 21 percent.
On the hardware side, the Systems and Technology segment generated $4.7 billion for the quarter. System z mainframe revenue grew by 61 percent; and MIPS systems sales enjoyed an 86 percent growth. Power System sales grew 12 percent from last year.
Services revenue growth trailed behind the rate for software and system sales, though it still grew at 10 percent. The company reported a backlog of $144 billion of work that has been booked, up by $15 billion from a year ago. Revenue from the Global Technology Services segment increased 11 percent to $10.2 billion and Global Business Services revenue rose 9 percent to $4.9 billion.
With these results, IBM beat analysts' estimates, which forecast that the company would bring in $25.345 billion in revenue, with $3.7 billion in net income, according to a poll by Thomson Financial. As a result of this quarter's performance, IBM has raised its expectations for operating (non-GAAP) diluted earnings per share to $13.25, up from $13.15.
"We had continued momentum in all of our growth initiatives, growth markets, business analytics, cloud, and Smarter Planet" initiative, CFO Mark Loughridge said during a webcast to discuss the earnings.
Sales of analytics software, for instance, increased by 20 percent in the quarter. "In business analytics, we're helping our customers optimize the massive amounts of data they're dealing with," he said.
Sales of cloud services and software also grew, according to the company. Loughridge didn't disclose the financial results from cloud deployments, but said the average transaction size has tripled and that IBM generated more revenue in the first half of 2011 from its cloud business than in all of 2010.
Revenue from the company's Smarter Growth technologies and services has grown over 50 percent, fueled by work and product sales in telecommunications, health care and retail.
IBM is seeing faster growth in emerging countries, where sales grew 13 percent, than in the fully industrialized G-7 countries, which produced a more modest 3 percent growth. The U.S. generated 6 percent growth and Canada 11 percent. In Japan, however, IBM's revenue declined 5 percent.
- Aberdeen Group: Marketing Analytics for Manufacturing: Forging Customer Insights There are no recalls for poor marketing. Manufacturers need to get their customer intelligence and messaging right the first time. Learn how.
- The Brave New World of Customer-Centric Manufacturing The Unique Opportunity for Manufacturers to Better Understand their Consumers
- See the Possibilities Utilizing Data Visualization Do you simply want to collect data, or do you want to derive business insights from it? What if you could quickly and...
Changing the Way Government Works: Four Technology Trends that Drive Down Costs and Increase Productivity
This paper discusses four technology-based approaches to improving processes and increasing
productivity while driving down department and agency costs.
- LIVE EVENT: 5/7, The End of Data Protection As We Know It. Introducing a Next Generation Data Protection Architecture. Traditional backup is going away, but where does this leave end-users?
- On-demand webinar: "Mobility Mayhem: Balancing BYOD with Enterprise Security" Check out this on-demand webinar to hear Sophos senior security expert John Shier deep dive into how BYOD impacts your enterprise security strategy... All IT Industry White Papers | Webcasts