IBM (IBM.US) stock plunges nearly 7.0% on Tuesday despite better than expected quarterly figures as the tech giant lowered its full-year cash forecasts due to the impact of a strong dollar and the loss of business in Russia.
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Adjusted earnings surged 43% YoY to $2.31 per share, topping analysts’ expectations of $2.27 per share.
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Revenues rose 9% to $15.54 billion, beating Wall Street projections of $15.16 billion partially thanks to rising demand for the company’s AI and hybrid cloud products.
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“With our first half results, we continue to expect full-year revenue growth at the high end of our mid-single digit model.” said CEO Arvind Krishna
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Consulting revenues rose 9.8% to $4.8 billion, up 9.8%, above the analyst consensus of $4.64 billion, while infrastructure revenues surged 19% to $4.2 billion, while analysts were looking for $3.76 billion
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On the flip side financing revenues plunged nearly 30% to $100 million, while software revenues increased 6.4% to $6.2 billion, however missed the estimates of $6.3 billion
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Adjusted gross margin stood at 54.5% in the quarter, compared to market estimates of 56.4%. Free cash flow was reported at $2.09 billion.
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Company took a $900 million hit to second quarter revenues owing to the surging U.S. dollar, which was hovering near 20-year highs during much of the second quarter, a figure that was around $200 million higher than its prior forecast.
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For the current fiscal year the company forecasts $10 billion in free cash flow, down from the previous forecast range of $10 billion to $10.5 billion. IBM expects “constant currency revenue growth at the high end of its mid-single digit model.”
IBM (IBM.US) stock launched today’s session with a massive bearish price gap, below the lower limit of the triangle formation and 200 SMA (red line), however sellers struggle to break below major support at $129.00. Source: xStation5
