IBM Beats Estimates (Update)

SAN FRANCISCO -- Despite a shaky economy, IBM(IBM Quote) charged past Wall Street's expectations for the second quarter and raised its earnings outlook for the current fiscal year.

The company said Thursday that net income for the second quarter was up 22.3% to $2.76 billion, or $1.98 a share, from $2.26 billion, or $1.55 a share, a year earlier.

Revenue rose 12.8% to $26.8 billion from $23.77 billion a year ago. Adjusted for currency changes, revenue rose 6%.

Analysts polled by Thomson Reuters had been expecting revenue of $25.92 billion and earnings of $1.82 a share, excluding charges.

Shares of IBM were down 77 cents, or 0.6%, to $125.75 in recent extended trading. IBM's stock has gained nearly 21% since the beginning of the year.

"This is one of the best quarters I have seen," Mark Loughridge, chief financial officer of IBM, told analysts on a conference call.

IBM posted strong numbers from all regions. Second-quarter revenue in the Americas was $10.9 billion, an increase of 6%, adjusting for currency. Revenue from Europe, Middle East, and Africa were $9.8 billion, up 7%. Asia-Pacific revenue gained 6% to $5.3 billion.

Turbulence in the U.S. economy and the financial services sector did little to hold back IBM. The company posted a 6% growth on a constant currency basis in its financial services segment.

Total gross profit margin was 43.2% in the second quarter compared with 41.8% a year ago.