(Reuters) - IBM raised its full-year earnings target despite a shortfall in revenue after a currency hit of $1 billion, easing concerns that the company would echo industry warnings on softer tech spending.
International Business Machines Corp, which has been shifting its focus from hardware to higher-margin services and software over the past decade, said on Wednesday it now expects full-year earnings per share - excluding items - of at least $15.10 versus at least $15.00 previously.
It said in the second-quarter earnings per share, excluding items, was $3.51, beating average analysts’ estimate of $3.43.
Revenue fell 3 percent to $25.8 billion from the year-ago period and missed average expectations of $26.27 billion.
A number of companies such as Cisco Systems Inc have cautioned that tech spending may slow down in the second half of 2012 and companies such as Advanced Micro Devices Inc have warned that earnings would suffer.
(For graphic: U.S. tech companies since July 2 link.reuters.com/rew39s)
”It’s very nice that they beat expectations on earnings,“ said Richard Sichel,” Chief Investment Officer at Philadelphia Trust Co. “I would say that’s really what investors are looking for. You get a very credible forecast this way and what they said was more positive than how people have been feeling.”
IBM shares have fallen 11 percent in the three months since it reported a quarterly revenue shortfall when it last released earnings. Those results raised concerns among some investors that the stock had gotten ahead of itself after hitting a record high of $210.69 on April 3. The broader Nasdaq composite index has fallen 4 percent over the past three months.
Reporting by Nicola Leske; Additional reporting by Jim Finkle; Editing by Richard Chang