Shares of International Business Machines (NYSE:IBM) rose as much as 4% in extended trading after the technology company reported second-quarter earnings that beat analysts’ expectations.
IBM’s earnings per share (EPS) came in at $2.33 U.S. versus $2.29 U.S. per share expected by analysts, according to Refinitiv data. The company’s quarterly revenue totalled $18.75 billion U.S. compared to $18.29 billion U.S. expected by analysts.
IBM’s revenue grew 3% year-over-year in the quarter, according to a statement, the fastest growth for the company in three years. In the previous quarter, IBM’s revenue grew 0.9%. The company reiterated its expectation that revenue will grow, rather than decline, for full year 2021.
IBM’s Global Technology Services segment, containing managed services, outsourcing and support, delivered $6.34 billion U.S. in revenue. That was up slightly and above the $6.23 billion U.S. consensus among analysts polled by FactSet.
The Cloud & Cognitive Software business, which includes Red Hat, contributed $6.10 billion U.S. in revenue, up 6% and more than the FactSet consensus of $5.93 billion U.S.
The company’s Global Business Services consulting unit had $4.34 billion U.S. in revenue, growing almost 12% and higher than the $4.03 billion U.S. forecast by analysts. Systems revenue, including hardware, came out to $1.71 billion U.S., which was down 7% but met analysts’ expectations.
In the quarter, IBM spent $1.75 billion U.S. on acquisitions, the most in a single quarter since it closed the $34 billion U.S. Red Hat deal in the third quarter of 2019. The company said it was acquiring process-mining software company myInvenio, application-management company Turbonomic and Salesforce consulting company Waeg.
The company also announced two nanometer chip technology, as well as new artificial-intelligence features for its Watson Studio software for building models.
IBM’s share price is now up 9% since the start of the year, while the S&P 500 index is up almost 13% over the same period.
