July 20, 2020 / 8:08 PM / 25 days ago

IBM earnings beat estimates on cloud strength

July 20 (Reuters) - International Business Machines Corp posted quarterly revenue and profit above analysts’ estimates on Monday, riding on the strength of its high-margin cloud computing business.

IBM has jettisoned some of its legacy business to focus on cloud computing, an area that has seen a lot of action in recent years as companies ramp up their digital shift to control costs and boost efficiency.

Revenue from the cloud business, previously headed by IBM’s new boss Arvind Krishna, rose 30% to $6.3 billion in the second quarter.

Krishna took over as chief executive officer from Ginni Rometty in April, while appointing former Bank of America Corp’s top technology executive Howard Boville as the new head of IBM’s cloud business.

IBM’s total revenue fell 5.4% to $18.12 billion in the quarter, but came in above analysts’ estimates of $17.72 billion, according to IBES data from Refinitiv. Excluding the impact from currency and business divestitures, revenue declined 1.9%.

The company’s net income fell to $1.36 billion, or $1.52 per share, in the quarter ended June 30 from $2.5 billion, or $2.81 per share, a year earlier.

Excluding items, the company earned $2.18 per share, above estimates of $2.07 per share. (Reporting by Munsif Vengattil in Bengaluru: Editing by Maju Samuel)

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