IBM posts 12% jump in Q2 profit; paints rosy outlook

Global IT major IBM has reported a 12 per cent growth in profit at $3.1 billion in the second quarter ended June this year and raised its revenue guidance for the full year.

The company had a profit of $2.76 billion in the second quarter of June 2008, IBM said in a statement.

However, the total revenue decreased 13 per cent to $23.3 billion in the latest quarter from $26.82 billion in the corresponding year-ago period.     

"As a result of our strategic transformation, we have a very strong business model that is delivering superior earnings, cash and client value.     

"We have continued our strategic investments in Smarter Planet solutions, business analytics and next generation data centres. As a result we are optimistic about how IBM is positioned to make the most of current growth opportunities as well as those that emerge as the economy recovers," IBM Chairman President and Chief Executive Officer Samuel J Palmisano said.     

IBM revised its guidance for the full-year 2009 earnings to at least $9.70 per share compared with its previous expectation of at least $9.20 per share, the statement said.     

The company expects full-year 2009 pre-tax income for its software segment to grow at a double-digit rate and reach about $8 billion.

"We are well ahead of pace for our 2010 roadmap of $10 to $11 per share," Palmisano added.     

Revenues from the systems and technology segment totaled $3.9 billion for the quarter, down 26 per cent. IBM ended the second quarter of 2009 with $12.5 billion of cash on hand and generated free cash flow of $3.4 billion.     

"The balance sheet remains strong, and the company is well positioned to take advantage of opportunities," IBM said.     

In Asia-Pacific region revenues decreased seven per cent to $4.9 billion in the second quarter of 2009, while in America IBM's revenue drop by nine per cent to $9.9 billion in the same period.     

Net income for the six months ended June 30, 2009 was $5.4 billion compared with $5.1 billion in the year-ago period, an increase of 6 per cent.      

Revenues for the six-month period totaled $45.0 billion, a decrease of 12 percent compared with $51.3 billion for the six months of 2008.     

The company's revenues from its key middleware products, which include WebSphere, Information management, Tivoli, Lotus and Rational products, were $3 billion, a decrease of two per cent as compared to the year ago period.