International Business Machines Corporation (NYSE: IBM) on Wednesday announced second quarter revenue and earnings that beat analysts’ estimates, driven by the strong growth in its cloud business.
Revenue rose 4% to USD 20 Billion in the second quarter, beating analysts’ projection of USD 19.85 Billion, according to Thomson Reuters.
Excluding certain items, the Company earned USD 3.08 per share in the second quarter. Analysts polled by Thomson Reuters had expected earnings of USD 3.04 per share.
The better-than-expected revenue is driven by strategic imperatives business, which is cloud computing, AI and security software. Revenue in strategic imperative business rose 15% to US 10.1 Billion. Revenue in Cloud business jumped 20% to USD 4.7 Billion.
"We delivered strong revenue and profit growth in the quarter, underscoring IBM's progress and momentum in the emerging, high-value segments of the IT industry," said Ginni Rometty, IBM Chairman, President and Chief Executive Officer. "More clients are engaging IBM on their journey to the cloud, and deploying IBM Cloud, Watson AI, analytics, blockchain and security solutions. This demonstrates IBM's unique leadership in providing innovative technology coupled with deep industry expertise, trust and security."
IBM shares rose 3.15% to USD 149 per share in the early trading on Thursday.
"We increased revenue, grew pre-tax income double digits and expanded pre-tax income margins year to year, while continuing to invest in the business and return capital to shareholders," said James Kavanaugh, IBM Senior Vice President and Chief Financial Officer. "We remain focused on delivering consistent operational performance, in line with our longer-term model."