IBM profit grew 12% to $3.1 billion in its second quarter, which surpassed the Wall Street expectations. The reduction in its workforce and expenses has made up for the drop in revenue.
For the second quarter of 2009, the company reported revenues of $23.3 billion, down 13%, or 7% after the currency adjustments, compared to the year-ago quarter.
The company posted a pre-tax income margin of 18.3%, up 4.1 points, which is the largest increase in more than three years and the gross profit margin rose 2.3 points to 45.5%.
Samuel Palmisano, chairman, president and chief executive officer of IBM, said: As a result of our strategic transformation, we have a very strong business model that is delivering superior earnings, cash and client value.”
Geographically, the America’s revenue which is the IBM’s biggest market dropped 9% to $9.9 billion and the revenues from the Europe/Middle East/Africa was down 20% to $7.9 billion. Asia-Pacific revenues decreased 7% to $4.9 billion.
The revenue from the software segment was $5.2 billion, down 7% compared with the second quarter of 2008. Revenues from the systems and technology segment totalled $3.9 billion for the quarter, down 26% and operating systems revenue decreased 11% to $529m compared with the prior-year quarter.
Palmisano added: “We have continued our strategic investments in Smarter Planet solutions, business analytics and next generation data centers. As a result we are optimistic about how IBM is positioned to make the most of current growth opportunities as well as those that emerge as the economy recovers. We are well ahead of pace for our 2010 roadmap of $10 to $11 per share.
IBM said it expects full-year 2009 earnings of at least $9.70 per share compared with its previous expectation of at least $9.20 per share. It expects full-year 2009 pre-tax income for its software segment to grow at a double-digit rate and reach around $8 billion.
