IBM Beats On Q2 Earnings, Q3 Revenue Outlook Unimpressive
Zacks Investment Research | Jul 18, 2017 09:58PM ET
International Business Machines Corp (NYSE:IBM) reported second-quarter 2017 non-GAAP earnings of $2.97 per share, which increased 0.7% from the year-ago quarter and beat the Zacks Consensus Estimate by 24 cents (8.8%).
Revenues of $19.30 billion missed the Zacks Consensus Estimate of $19.49 billion and decreased 4.7% year over year. At constant currency (cc), revenues declined 3%. However, revenues improved 6.2% sequentially. Unfavorable foreign exchange negatively impacted revenues by almost 200 basis points (bps), which was partially offset by 40 bps benefit from acquisitions.
Geographically, in the Americas (down 3% at cc), revenues in the U.S. were down (5% at cc) while management noted solid growth in Canada (up 2% at cc) and Latin America. Revenues in Europe, Middle-East and Africa (down 5%) declined due to weakness in Germany and U.K. IBM noted sequential improvement in Asia-Pacific revenues (down 1% at cc) including Japan (up 1% at cc).
IBM expects sluggish revenues in the third-quarter due to seasonality. Management projects sequential decline of almost $1 billion, which is anticipated to be partially mitigated by revenue contributions from the new mainframe product and new services contracts ($200–$300 million contribution).
International Business Machines Corporation Price, Consensus and EPS Surprise
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