Weaker revenue did not stop International Business Machines (NYSE:IBM) from reaping higher profit in the most recent quarter.
Earnings and Revenue The company fell short of estimates with EPS of $3.34 a share and revenues of $25.78 billion. Analysts were expecting EPS of $3.42 a share and revenues of $26.28 billion. The estimates of 20 analysts ranged from profit of $3.31 to profit of $3.51.
Net income for the second quarter was $3.88 billion. This is 5.9% higher than the year-ago quarter. Revenue fell 3.3% from $26.67 billion in the same period last year.
Company Fundamental Trends Last quarter marked the third in a row of rising net income. Slumping revenue in the last quarter ends The company's streak of at least four consecutive quarters of revenue increases.
History Against Expectations The company missed forecasts after topping estimates in the previous two quarters. In the first quarter, it topped the mark by 15 cents, and in the fourth quarter of the last fiscal year, it was ahead by 9 cents.
Official Comment: "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," said Ginni Rometty, IBM president and chief executive officer. "These are fundamental elements of our long-term business model. Looking ahead, we are well positioned to deliver greater value to a wider range of clients and to our shareholders. 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 $15.10."
Estimates provided by Zacks Investment Research and company fundamentals from Xignite Financials.