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IBM Q2 Profit Tops Street, Revenues Meet View

International Business Machines Corp. (IBM) Wednesday reported a profit for the second quarter that trumped Wall Street estimates, while revenues came in line with expectations. Moving ahead, the company reaffirmed its outlook for the full year 2019.

Armonk, New York-based IBM reported second-quarter profit of $2.50 billion or $2.81 per share, up from last year's profit of $2.40 billion or $2.61 per share.

Excluding one-time items, earnings from continuing operations were $3.17 per share, up from $3.08 per share last year. Analysts had a consensus earnings estimate of $3.07 per share for the quarter.

IBM's second-quarter revenues dropped to $19.16 billion from $20.00 billion last year. Analysts polled by Thomson Reuters expected revenues of $19.16 billion for the quarter.

IBM is divesting off its low-margin and unprofitable hardware businesses to improve profitability. The company is now striving hard to make IBM a company that provides cloud computing and data analytics.

Chief Executive Ginni Rometty said, "In the second quarter, we continued to grow in the high-value areas of the business, led by a strong performance across our Cloud and Cognitive Software segment. With the completion of our acquisition of Red Hat, we will provide the only true open hybrid multicloud platform in the industry, strengthening our leadership position and uniquely helping clients succeed in chapter 2 of their digital reinventions."

Total cloud revenue for over the last 12 months was $19.5 billion, up 5 percent.

Looking forward to 2019, the company said it "remains on track to achieve" adjusted earnings of at least $12.45 per share. Analysts currently estimate earnings of $13.90 per share.

IBM closed Wednesday's trading at $143.07, down $0.46 or 0.32%, on the NYSE. The stock, however, gained $0.63 or 0.44% in the after-hours trade.

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