July 19, 2011- Big Blue ended their second quarter with $27.7 billion in sales representing a growth of over 12% with profits up 8% to $3.6 billion. There was concern that net income did not grow at the same rate as revenues but IBM is only concerned with their earnings per share and that figure was a $3 per share or up just less than 15%.
The largest portion of revenues for IBM were generated by their Global Services with sales of over $15 billion representing a 10% increase from the same quarter one year ago. They did have to have some “workforce rebalancing” or in layman’s terms layoffs in Global Services but that for the most part was in Europe.
The chief financial officer for IBM Mark Loughridge said “the rebalancing would be something of a norm for IBM moving forward.”
Global Technology Services had sales of $10 billion for the quarter and was up 11% with income before taxes of $1.4 billion. Without taking into consideration rebalancing the Global Technology Services section would have had a pre tax margin of 8%, not the 1% that they reported.
IBM has consistently grown their software section and the second quarter of 2011 was no exception as sales increased by 17% to $6.2 billion. CFO Loughridge said this represented the fifteenth quarter that IBM’s key brands as a whole had gained market share.