(Boursier.com) — IBM , the US technology services giant, missed the revenue consensus last night for its second quarter but beat the profit consensus. The group maintains its annual sales growth estimates ranging from 3 to 5% and also expects a free cash flow of 10.5 billion dollars for the year. In the second quarter, IBM announced sales of 15.5 billion dollars, with little change compared to the previous year and slightly lower than the market consensus. Adjusted earnings per share were $2.18, compared to analysts’ average forecast of about $2.
Management reorients the group around software and services. Software sales rose 7.2% to $6.6 billion. Revenue for the Red Hat unit jumped 11%, an acceleration from the prior period. Consulting revenue rose 4.3% to $5 billion in the quarter to the end of June. The group of Armonk, New York, evokes on this segment a solid activity pipeline, although discretionary projects continue to be delayed. Nevertheless, the slowdown in consulting growth compared to the first quarter confirms IT spending under pressure. IBM’s shortfall in the quarter stemmed largely from its infrastructure segment. The unit posted revenue of $3.6 billion, while analysts expected $3.9 billion. On the AI side, and while IBM’s share price has not benefited from the recent euphoria, note that “Big Blue” is deploying its own solution, called WatsonX. IBM finally announced last month the $4.6 billion acquisition of Apptio, an IT budget management platform.
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