NEW YORK: International Business Machines Corp beat analysts’ estimates for second-quarter profit on Wednesday, propped up by recurring growth in its high-margin cloud business.
The company is relying on its cloud business in the face of slowing growth in its legacy businesses, including mainframes and storage systems.
Last week, it wrapped up its $34 billion acquisition of Linux maker Red Hat Inc, its biggest deal so far, to expand its subscription-based software offerings.
Revenue from cloud business, the faster-growing service and a key metric for the company, grew 5 per cent to $4.8 billion during the quarter.
However, a stronger dollar dragged down its revenue by about $500 million. IBM makes over 60 per cent of its revenue from outside the United States.
IBM’s Global Technology Services unit, its biggest business by revenue that includes infrastructure, cloud and technology support services, reported a 6.7 per cent drop in revenue to $6.84 billion, missing analysts’ estimates of $6.92 billion, according to three analysts polled by Refinitiv IBES.
The company’s systems business, which includes its mainframe servers and storage hardware, fell 19.5 per cent to $1.75 billion.
Total revenue slipped 4.2 per cent to $19.16 billion, in line with analysts’ estimates of $19.16 billion. — Reuters
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