IBM Q2 results tops estimates amid signs of AI momentum; lifts cashflow guidance

Investing.comJul 25, 2024 2:38 AM

Investing.com -- IBM reported Wednesday second-quarter earnings that beat analysts’ forecasts as growing demand for generative AI boosted new business wins and big blue raised its free cash flows forecast for the year.

International Business Machines (NYSE:IBM) was about 4% higher in premarket Thursday trade following the report.

For the three months ended Jun. 30, IBM reported earnings per share of $2.43 on revenue of $15.77 billion. Analysts polled by Investing.com anticipated EPS of $2.17 on revenue of $15.62B.

The company's software business, which includes transaction processing and hybrid platform&solutions, reported revenues of $6.7B, up 7.1%. Hybrid platform&solutions was up 5%, following an 7% jump in Red Hat.

"Our book of business for generative AI has grown to more than two billion dollars since the launch of watsonx one year ago," the company said.

Revenue in the company's consulting business fell 0.9% to $5.2B amid weaker performance in technology consulting and applications operations segments.

Gross margin climbed to 56.8%, up 180 basis points from the same period a year earlier.

Looking ahead, the company raised its free cash flow forecast now expecting it to come in above $12B.

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