IBM beats Q2 estimates, raises expectations for full year
IBM's mainframe revenue jumped 61% as it posted better than expected results for its second quarter with revenue up 12% to $26.7bn and an 8% increase in net income to $3.7bn.
Despite the surge in mainframe revenue and a 112% rise in total hardware income, IBM's hardware sales accounted for less than 18% of total revenue and 8% of IBM's pre-tax income of $4.9bn. Services revenue, up 10%, made up nearly 57% of total sales and 45% of pre-tax income. Software sales increased 17% to $6.2bn (23% of IBM total revenue) and accounted for 47% of IBM's pre-tax income.
On the back of the Q2 results, the company raised expectations for its full year 2011 figures. Commenting on the figures, IBM chairman, president and CEO Sam Palmisano said: "As IBM begins its second century, we continue a process of transformation, positioning the company to lead in the future and deliver higher value to our clients and shareholders."
Total operating expenses increase 20% to $7.4bn and total gross profit margin was up slightly at 46.4%. IBM paid a tax rate of 25%.