IBM Grows Second Quarter Revenues
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At the age of 100, IBM still is continuing to grow and expand.
IBM (NYSE:IBM) reported second quarter fiscal 2011 earning on Monday, with both revenue and income growth, as multiple segments of its business expand. Part of the growth is fueled by IBM's expanding presence in growth markets and some is coming at the expense of rivals HP and Oracle, especially in the Unix space.
For the quarter, IBM reported Net Revenues of $26.7 billion for a 12 percent year-over-year gain. Net Income was reported at $3.7 billion for an 8 percent year-over-year gain while GAAP Earnings Per Share (EPS) came in at $3.00 up by 15 percent.
IBM's second quarter performance is driving them to increase their full year 2011 guidance for EPS of $13.25 per share, up by $0.25 from what IBM had forecast at the beginning of the year.
"The 12 percent revenue growth was driven by our transactional businesses in hardware and software," Mark Loughridge, Chief Financial Officer of Finance and Enterprise Transformation and Senior Vice President at IBM said during the company's earnings call.
Loughridge noted IBM's Software had a 'terrific' quarter with revenue of $6.2 billion, which is up 17 percent on a year-over-year basis. He noted that WebSphere had a 'powerful' quarter, growing 55 percent year-over-year and gaining share.
In terms of hardware, IBM's Systems and Technology revenue was $4.7 billion, up by 17 percent. Loughridge noted that hardware performance was driven by double-digit growth in System z, POWER, System x and Storage, and continued growth in Retail Store Solutions and Microelectronics.
Another key area of growth for IBM came from its UNIX business which is growing in part at the expense of Oracle and HP.
"I think, that since beginning of 2009, we're talking about 2,300 customers, $2.3 billion of business that we pulled away from our competition, with 60 percent of that Oracle and 30 percent Hewlett-Packard," Loughridge said. "We've had growth in the UNIX business now for 2 quarters in a row, 8 percent in the first quarter, 5 percent in the second quarter, all of that growth was driven by IBM."