IBM raises 2013 outlook; Q2 earnings beat, revenue drops

A sign at the IBM facility near Boulder, Colorado, is photographed on September 8, 2009. 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. -- F
A sign at the IBM facility near Boulder, Colorado, is photographed on September 8, 2009. 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. -- FILE PHOTO: REUTERS

(REUTERS) - 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.

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

International Business Machines Corp said on Wednesday that excluding a US$1 billion (S$1.26 billion) restructuring charge related to job cuts, non-generally accepted accounting principles (GAAP) earnings per share expectations were being raised to at least US$16.90 from US$16.70.

Full-year GAAP diluted earnings per share are at least US$15.08, IBM said.

The Armonk, New York-based company said its quarterly non-GAAP income rose 3 per cent, excluding a US$1 billion restructuring charge, to US$4.3 billion, or US$3.91 a share, compared with US$3.51 a year ago and analyst estimates of US$3.77 a share, according to Thomson Reuters I/B/E/S.

On a GAAP basis, earnings per share (EPS) were US$2.91, down 13 per cent; net income was US$3.2 billion, down 17 per cent.

Revenue dropped 3 per cent to US$24.9 billion below average analyst expectations of US$25.4 billion.

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 .