Biggish Blue saw revenues climb nine percent to $15.5 billion in its second quarter, thanks mostly to its infrastructure businesss.
Sales jumped 16 percent on a constant currency basis, including around five points from sales to spin-off company Kyndryl, while pre-tax income stood at $1.7 billion.
On a non-GAAP basis, pre-tax income was $2.5 billion, up 48 percent year-on-year.
CEO Arvind Krishna said on the company’s earnings call.
” “In the second quarter, we drove solid results reflecting the investments and changes we have been making to execute our strategy,” With this performance, we continue to deliver on our model of mid-single-digit revenue growth. Technology plays an important role in today’s business environment. With this demand backdrop, we are executing our hybrid cloud and AI strategy. We have made changes to our portfolio and focused investments in our offerings, technical talent, our ecosystem, and go-to-market model.”
Software sales were up 6.4 percent for the quarter to $6.2 billion, with Red Hat up 12 percent and hybrid cloud revenue increasing by 14 percent.
Revenue for the company’s infrastructure segment saw the biggest increase at 19 percent to $4.2 billion.
And revenues for the vendor’s consulting business reached $4.8 billion, an increase of 9.8 percent year-on-year, with its technology consulting group reporting growth of 14 percent.
Despite all these good bits of news, IBM shares fell by about six percent in early trading on Tuesday after the company lowered its forecasts for free cash flow due to the impact of a strong dollar and the loss of business in Russia.
On the earnings call, CFO and senior vice-president James Kavanaugh said: “The velocity of the strengthening is the sharpest that we’ve seen in over a decade. And it’s been a broad-based dollar story, as you all know. All the currencies we hedge, over half of them are down double digits against the U.S. dollar this year. So, it’s, I would say, unprecedented in what we’ve seen in the rate, the breadth of magnitude.”
