IBM revenue dips 3% to $24.9 billion, profit plummets 17% in second quarter

IBM second quarter revenues decreased 3 percent to $24.9 billion. The IT giant’s net income plummeted 17 percent to $3.2 billion.

IBM raised its full-year outlook based on cost cutting and a strong software pipeline.

IBM said that excluding a $1 billion restructuring charge related to job cuts, it raised its non-GAAP earnings per share expectations for this year by 20 cents to at least $16.90.

The job cuts are mainly outside of the United States. About 60 percent will be from IBM’s services division and 20 percent each from its hardware and software segments.

Ginni Rometty, IBM chairman, president and chief executive officer, said that the company will continue investing in its strategic growth initiatives, acquiring and divesting capabilities, re-balancing skills and taking action in the areas that are not performing.

IBM’s sales revenue in the Americas’ was $10.7 billion, a decrease of 3 percent.

Revenues from Europe/Middle East/Africa were down 1 percent to $7.8 billion.

Asia-Pacific revenues decreased 8 percent to $5.8 billion.

OEM revenues were $538 million, up 5 percent.

Revenues from the company’s growth markets were flat.

IBM says revenues in the BRIC countries — Brazil, Russia, India and China — were flat.

Global Technology Services segment revenues decreased 5 percent to $9.5 billion.

IBM’s Global Business Services segment revenues dipped 1 percent to $4.6 billion.

The estimated services backlog at June 30 was $141 billion, up 3 percent.

IBM’s revenues from the Software segment increased 4 percent to $6.4 billion.

Revenues from IBM’s key middleware products — WebSphere, Information Management, Tivoli, Social Workforce Solutions (formerly Lotus) and Rational products — increased 9 percent to $4.3 billion.

Revenues from the WebSphere family of software products increased 9 percent.

Information Management software revenues increased 5 percent.

Revenues from Tivoli software increased 13 percent.

Revenues from Social Workforce Solutions increased 22 percent, and Rational software increased 12 percent.

Revenues from the Systems and Technology segment decreased 12 percent to $3.8 billion.

Excluding Retail Store Solutions (RSS) revenues dipped 8 percent.

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