Shares of International Business Machines Corp. (IBM) are down 6% after the technology
company lowered its cash forecast for the remainder of this year.
However, despite the disappointing forward guidance, IBM still delivered second quarter
earnings that beat Wall Street expectations.
The company’s earnings per share (EPS) for the April through June period came in at $2.31
U.S. compared to $2.27 U.S. that was expected, according to Refinitiv data. Revenue amounted
to $15.54 billion U.S. versus $15.18 billion U.S. that was anticipated.
The strong results come after IBM spun off its managed infrastructure services business into
publicly traded Kyndryl (KD) last November, and sales to Kyndryl helped boost IBM’s Q2
revenue.
However, IBM said it now expects $10 billion U.S. in free cash flow for the remainder of 2022,
down from a range of $10 billion U.S. to $10.5 billion U.S. previously. The company blamed the
strong U.S. dollar and suspension of its business in Russia for the lowered outlook.
Still, IBM reported $6.17 billion U.S. in software revenue in the second quarter, up 6% from a
year earlier. The company’s consulting division generated $4.81 billion U.S. in revenue, rising
nearly 10% from the year ago quarter.
IBM is one of the few U.S. technology companies whose stock is up this year. Prior to today’s
decline, IBM stock had risen 2% this year to trade at $138.13 U.S. per share.