IBM’s net income up 6 pc at USD 3.9 billion in Apr-Jun quarter

Jul 19, 2012 |

New York

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Bolstered by good performance in India, China and other growth markets, IBM has reported a nearly six per cent increase in net income at USD 3.9 billion in the three months ended June 2012, even as its revenues slumped.

In the year-ago period, technology major had USD 3.66 billion net income. The company's revenue in the latest June quarter dropped over three per cent to USD 25.78 billion.

The same was at USD 26.66 billion in the same period a year ago. The company recorded a two per cent increase (up 8 per cent, adjusting for currency) from its growth markets and had double-digit revenue growth in more than 30 countries.

Revenues from BRIC countries -- Brazil, Russia, India and China -- increased 5 per cent (up 12 per cent, adjusting for currency), it said in a statement on Wednesday.

IBM president and CEO Ginni Rometty attributed the strong performance to the company's long-term business model.

"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," Rometty said.

Quarterly revenues slipped in most of the regions including the US and Europe. Revenues from Europe, Middle East, Africa declined nine per cent to USD 7.9 billion, while that from the Asia-Pacific climbed two per cent to USD 6.3 billion.

In terms of segments, revenues from Global Technology Services fell 2.4 per cent to USD 9.9 billion while that from Global Business Services went down four per cent to USD 4.7 billion.

Systems and Technology segment, too, saw sluggish performance as its revenues tumbled nine per cent to USD 4.3 billion.

However, revenues from software remained flat at USD 6.2 billion. Meanwhile, the company's net income for six months ended June increased by over six per cent to USD 6.9 billion.

Buoyed by positive performance in the 2012 first half, IBM is optimistic about its prospects in the coming months.

"Given our performance in the first half and our outlook for the second half, we are raising our full-year operating earnings per share expectations to at least USD 15.10," Rometty said.

The earnings per share projection has been raised from earlier estimate of USD 15.

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