IBM Eases Past Earnings View, Raises Guidance

ARMONK, New York. ( TheStreet) -- IBM ( IBM) eased past the average analysts' earnings forecast in its second-quarter results, released after market close on Wednesday, and raised its full-year guidance.

Currency pressures, however, weighed heavily on the Dow component's top line.

Excluding items, the tech giant earned $3.51 a share, up from $3.09 a share in the same period last year. Analysts surveyed by Thomson Reuters were looking for earnings of $3.42 a share.

IBM's second-quarter revenue came in at $25.78 billion, down 3% for the same period last year and well below the consensus view of $26.27 billion. Currency translation negatively impacted revenue growth by approximately $1 billion, according to the Armonk, N.Y.-based company.

IBM also raised its expectations for fiscal 2012 earnings to at least $15.10 a share from at least $15 a share. Wall Street's current estimate is for a full-year profit of $15.06 a share

"Looking ahead, we are well positioned to deliver greater value to a wider range of clients and to our shareholders," explained Ginni Rometty, IBM's CEO, in a statement. "Given our performance in the first half and our outlook for the second half, we are raising our full-year operating earnings per share expectations to at least $15.10."

The guidance hike clearly resonated with investors. IBM shares rose 1.73% to $191.50 in extended trading on Wednesday.

Revenue from IBM's Global Technology Services division slipped 2% year-over-year (or up 2%, adjusted for currency) to $10 billion, with Global Business Services revenue down 4% (down 1% adjusted for currency) to $4.7 billion.

Software revenue was flat, or up 4% adjusted for the effects of currency, at $6.2 billion. Revenue from IBM's Systems and Technology group, which encompasses servers and storage was down 9%, or 7% adjusted for currency, to $4.3 billion.

-- Written by James Rogers in New York.

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