Shares of IBM rose after a quarterly earnings beat. The stock fluctuated immediately following the release of earnings, but then increased by over 2.5% above the closing prices on Tuesday of $144.52.
IBM posted earnings per share of $3.08 versus analyst expectations of $3.04 per share. Revenue for the company reached $20.0 billion, while analysts were expecting $19.95 billion.
This is the third straight quarter for IBM of growth in revenue following five straight years of revenue declines year over year. Revenue increased during the quarter by 4%.
During the quarter, IBM’s gross margin was 46.5%. That figures was just below analyst estimates that average 47%.
For on the first time over half of IBM’s revenue was generated from the company’s strategic imperatives areas that consist of mobile, social, cloud and analytics. In that segment revenue reached $10.1 billion. The category saw revenue growth of 26% for the quarter; with the growth rate increasing sequentially from growth of 15%.
During the previous three-month period, those same categories gave IBM 47% of its total revenue.
IBM said during the second quarter, its revenue from the cloud grew by 20% with a total of $4.7 billion. For annual revenue run rate cloud as a service delivered $11.1 billion which was up year to year by 26%. The capital expenditures for the company during the quarter were slightly more than $1 billion.
The largest segment of the business, Cloud Platform and Technology Services equaled analyst expectations for revenue of $8.62 billion.
Even without the factoring in of the company’s latest mainframe computer IBM saw strength. A couple of quarters ago the new mainframe was introduced and has provided growth in revenue, CFO James Kavanaugh said Wednesday during the conference call with Wall Street analysts.
The CFO added that IBM continues with its expectation of closing the year with a minimum of $13.80 in earnings per share with the exclusion of certain items. During the second quarter scale efficiencies were present as IBM increasingly focuses on its cloud services, and during the second six months of 2018, the company will see additional benefits from its workforce optimization added the CFO.
Prior to the earnings results for the second quarter, analysts were expecting full year earnings to be $13.78 per share.