On Wednesday, IBM reported its operating earnings for the second quarter that beat expectations on Wall Street, which provided reassurance to its investors following a hiccup during the first quarter.
Revenue however was weak as it fell 3% and was below forecasts of analysts. That has suggested that even the powerhouse that IBM has been of recent, it too is fighting with the many challenges of a soft worldwide economy and the ever-changing world of technology.
The software sector of the company enjoyed a strong quarter, profits margins were up and new contracts in its data analysis sector were up sharply, which was encouraging for future business. However, the company’s hardware division continued to struggle.
BM shares in Wednesday after hour trading were up 2.6% or over $5. On Wednesday, the stock had closed on $194.55.
Net income for the company dropped by 17% to just over $3.2 billion equal to $2.91 per share, in comparison to its $3.9 billion during the same period one year ago.
Included in those results was a charge of nearly $1 billion for cutting its employees. In April, IBM announced it would take the charge during this quarter, with the majority of the workforce affected being overseas.
Over recent years, IBM has taken charges annually that average hundreds of millions of dollars that it describes as work force balancing.
The business cuts workers in its high cost nations that are being cut back and adds more employees in other locations, especially in Asia, specifically in India.
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