Revenues at IBM and Texas fail to impress
IBM’S second quarter revenue missed expectations yesterday despite a growth in its higher-margin services and software units, which bolstered profits.
The US technology giant reported a two per cent rise in second quarter revenue to $23.7bn (£15.6bn).
IBM’s shares fell three per cent after-hours to $125.60 after closing at $129.79 as analysts on average had expected $24.2bn.
Net profit, however, slightly exceeded expectations and rose to $3.4bn from $3.1bn a year earlier.
The New York-based company also raised its full-year outlook for earnings per share of “at least $11.25” from a previous forecast of “at least $11.20”.
IBM has been shifting away from commoditised hardware products in the past decade, focusing instead on software and services. It is now the world’s biggest IT services provider.
Meanwhile, chip maker Texas Instruments (TI) yesterday posted an increase in quarterly earnings in line with expectations.
The maker of chips for everything from mobile phones to manufacturing gear said its profit rose to $769m compared with $260m in the same quarter last year.
Also, revenue rose to $3.5bn from $2.46bn compared to the same quarter last year. The firm forecast current quarter earnings per share of 64 cents to 74 cents on revenue of $3.55bn to $3.85bn. Analysts on average were expecting earnings of 64 cents per share on revenue of $3.6bn.
TI’s best sellers were analog chips, which are used in phones and other electronics to regulate power and convert sound into electric pulses.