Judging from its second-quarter results, divesting its PC business may have been a good move for IBM .
IBM reported second-quarter results after the close on Monday, and while revenues declined 3.6% from the year-ago quarter to $22.27 billion, diluted earnings shot up 10.9% to $1.12 a share, beating analysts’ estimates by nine cents. Gross margins expanded to 39.4% without the money-losing PC unit, which was around for one month of the quarter. Excluding the PC business, sales grew 6% from the year-ago quarter, as the company rebounded strongly from a disappointing first quarter.
“IBM returned to form in this quarter,” CEO Sam Palmisano said in a statement. “In particular, strategic, high-growth businesses — in Business Performance Transformation Services, software and in key industry sectors and emerging markets — were among our best-performing operations, achieving double-digit revenue growth. In addition, IBM Business Consulting Services posted an outstanding quarter, with strong revenue growth and a 30 percent increase in signings. This performance reinforces our confidence in our business model, and in our mission to apply unique, high-value skills and solutions to transform our clients businesses.”
Shares of IBM jumped 4% in after-hours trading.
Stocks fell during the day on disappointing results from Citigroup .
The Nasdaq lost 11 to 2144, the S&P fell 6 to 1221, and the Dow lost 65 to 10,574. Volume declined to 1.58 billion shares on the NYSE, and 1.33 billion on the Nasdaq. Decliners led 19-12 on the NYSE, and 18-11 on the Nasdaq. Downside volume was 67% on the NYSE, and 66% on the Nasdaq. New highs-new lows were 150-24 on the NYSE, and 102-18 on the Nasdaq.
Schwab climbed 5% on its results.
Intermix rose 9.5% on a buyout offer.
Orckit and Plumtree
fell on warnings.