IBM reported better-than-expected second-quarter results, helped by demand for artificial intelligence tools. The Dow Jones tech giant also raised its full-year free cash flow forecast slightly.
In its earnings report released Wednesday night, IBM said it reported adjusted earnings of $2.43 per share on sales of $15.77 billion for the quarter ended June.Analysts surveyed by FactSet expected IBM to report adjusted earnings of $2.18 per share on sales of $15.62 billion.
In addition, IBM said it expects free cash flow in 2024 to exceed its previous estimate of $12 billion. The company reiterated its expectation for mid-single-digit revenue growth this year.
IBM's second-quarter earnings per share increased 11.5 percent, and sales rose 2 percent from a year earlier. Software sales rose 7 percent, making up for a 1 percent decline in consulting revenue. Software was IBM's largest selling division with $6.7 billion in sales in the quarter. Consulting was second, with $5.2 billion in sales in the June quarter.
Meanwhile, IBM leadership emphasized the need for its AI-related products.
“We had a strong second quarter that exceeded our expectations, driven by growth in revenue and free cash flow,” said CEO Arvind Krishna in a press release. “We continue to see customers turn to IBM for our technology and our expertise in enterprise AI, and since launching Watsonx a year ago, we have grown the size of our generative AI business to more than $2 billion.”
Krishna described the metric as more than $1 billion in its first-quarter report in April.
IBM's free cash flow for the quarter ended June was $2.6 billion. The company's free cash flow for the first six months of the year was $4.5 billion.
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