IBM shares retreat post Q2 earnings

IBM’s results outpaced expectations for income and revenue. The company began selling the z16 mainframe computer during the quarter, leading Z systems sales to jump 69%, compared with a decline of 19% in the prior quarter.

IBM’s revenue rose 9% year over year in the quarter, according to a statement. Income from continuing operations increased to $1.47 billion from $810 million in the year-ago quarter. The company’s shares slid as much as 4% in extended trading on Monday after the company trimmed its 2022 cash forecast. It still beat on the top and bottom lines.

IBM’s management called for $10 billion in free cash flow for all of 2022, down from the range of $10 billion to $10.5 billion that it provided in April. Kavanaugh blamed the strong dollar and the suspension of business in Russia.

Executives reiterated their plan for constant-currency revenue growth at the high end of their mid-single-digit model for the year. Currency negatively impacted reported revenue by over 6% of growth, or $900 million, which was $200 more than spot rates had indicated three months ago.

IBM reported $6.17 billion in software revenue in the second quarter, up 6% but below the expected $6.3 billion.

Earnings: $2.31 per share, adjusted, vs. $2.27 per share as expected by analysts.

Revenue: $15.54 billion, vs. $15.18 billion as expected by analysts.