IBM raises its full-year outlook on cost-cutting and strong data

 
City A.M. Reporter
IBM, the world's largest technology services company, raised its full-year outlook as it cut costs and reported second-quarter earnings that beat estimates.

International Business Machines said excluding a $1bn (£657m) restructuring charge related to job cuts, non-GAAP (generally accepted accounting principles) earnings per share forecasts were being raised to at least $16.90 from $16.70. Full-year GAAP diluted earnings per share are at least $15.08, IBM said.

The New York-based company said its quarterly non-GAAP income rose three per cent, excluding a $1bn restructuring charge, to $4.3bn, or $3.91 a share, compared with $3.51 a year ago and analyst estimates of $3.77 a share.

On a GAAP basis, earnings per share were $2.91, down 13 per cent; net income was $3.2bn, down 17 per cent.

Revenue dropped three per cent to $24.9bn, below average analyst expectations of $25.4bn.

Shares closed 0.36 per cent up at $194.55 but were up nearly three per cent in after-hours trade.

IBM also said that a "substantional second-half gain" it was expecting in its previous EPS outlook "will not likely be achieved" by the end of 2013.

Several brokerages had cut their price targets for IBM in the past weeks on concerns over revenue growth and recent weaker performance by competitors Oracle and Accenture .

Its shares were up nearly 3 percent in after-hours trade.