IBM raises '13 outlook; second-quarter earnings beat, revenue drops

Reuters Business News
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Posted: Jul 17, 2013 4:24 PM
IBM raises '13 outlook; second-quarter earnings beat, revenue drops

(Reuters) - IBM <IBM.N>, the world's largest technology services company, raised its full-year outlook as it cut costs and reported second-quarter earnings that beat estimates.

Its shares were up nearly 3 percent in after-hours trade.

International Business Machines Corp said on Wednesday that excluding a $1 billion restructuring charge related to job cuts, non-GAAP earnings per share expectations were being raised to at least $16.90 from $16.70.

Full-year GAAP diluted earnings per share are at least $15.08, IBM said.

The Armonk, N.Y.-based company said its quarterly non-GAAP income rose 3 percent, excluding a $1 billion restructuring charge, to $4.3 billion, or $3.91 a share, compared with $3.51 a year ago and analyst estimates of $3.77 a share, according to Thomson Reuters I/B/E/S.

On a GAAP basis, earnings per share were $2.91, down 13 percent; net income was $3.2 billion, down 17 percent.

Revenue dropped 3 percent to $24.9 billion below average analyst expectations of $25.4 billion.

IBM also said that a "substantial second-half gain" it was expecting in its previous EPS outlook "will not likely be achieved" by the end of 2013.

Several brokerages had cut their price targets for IBM in the past weeks on concerns over revenue growth and recent weaker performance by competitors Oracle <ORCL.N> and Accenture <ACN.N>.

(Reporting By Nicola Leske; Editing by Leslie Gevirtz)