IBM Profit Up 7.4%, Exceeding Expectations
International Business Machines Corp. said Monday that second-quarter profit climbed 7.4%, topping expectations, on increased sales in its fast-growing computer services business.
Net income rose to $1.45 billion, or $1.46 a share, from $1.35 billion, or $1.26, in the year-earlier period. Sales rose 3.8% to $18.87 billion from $18.18 billion.
The results were above most analysts’ expectations of $1.42 a share. Some analysts expected earnings of as much as $1.50 a share.
“We saw very good customer response to our new System/390 servers and continuing strength in services and hard-disk drives,” Chairman and Chief Executive Louis Gerstner said in a statement. “Our newer businesses continued to grow rapidly, while our more mature businesses showed increasing stabilization.”
IBM shares fell 75 cents to close at $103.75 on the New York Stock Exchange. The company’s shares rose to records last week amid expectations that earnings would surpass expectations and on optimism that demand would gain steam in the second half.
*
At a Glance:
Boeing Co. said increased jetliner deliveries lifted second-quarter profit 37% while pushing up costs so that earnings missed estimates for a second straight quarter. The world’s biggest aircraft maker said profit from operations climbed to $399 million, or 55 cents a share, from $292 million, or 43 cents, a year ago. The results were slightly lower than the 59-cents-per-share consensus of analysts.
Boeing’s aircraft sales are soaring as the company tries to complete its $15.2-billion takeover of McDonnell Douglas Corp. in the face of European Union objections. Growth is exacting its price, analysts said, as Boeing hires thousands of workers and pays overtime to raise production to record levels.
Exxon Corp. said second-quarter profit increased 25% on the strength of higher petroleum sales. Exxon earned $1.97 billion, or 79 cents a share, compared with $1.57 billion, or 63 cents a share, a year earlier.
Ashland Inc. said fiscal third-quarter profit rose 57% to $119 million, or $1.57 a share, from $76 million, or $1.10, a year earlier.
Unisys Corp.’s second-quarter earnings rose about eightfold, beating analysts’ expectations, to $41.9 million, or 8 cents a share, from $5.3 million, or a loss of 14 cents, in the year-earlier period.
Kimberly-Clark Corp. said second-quarter earnings fell slightly to $363.5 million, or 65 cents a share, in the April-June period, down from $364.7 million, or 64 cents a share, a year ago.
Nabisco Holdings Corp. posted a second-quarter profit of $103 million, or 38 cents a share, contrasted with a net loss of $216 million, or 81 cents, in the year-ago quarter.
Union Carbide Corp. said second-quarter profit rose 10% to $191 million, or $1.41 a share, from $173 million, or $1.23, in the year-ago quarter.
Host Marriott Corp.’s second-quarter earnings more than tripled to $26 million, or 13 cents a share, from $7 million, or 3 cents, a year earlier.
Comsat Corp. reported a second-quarter net loss of $10.3 million, or 21 cents a share, contrasted with earnings of $5.8 million, or 12 cents, in the 1996 period.
Ralston Purina Co. said fiscal third-quarter earnings rose 13% before gains and charges to $95.1 million, or 90 cents a share, from $84.3 million, or 79 cents, in the year-earlier period.
Tyco International Ltd. said its fiscal fourth-quarter earnings rose 46% to a record $137.9 million, or 82 cents a share, from $94.2 million, or 62 cents, in the year-earlier period.
America West Holdings Corp., the parent of America West Airlines, said second-quarter profit fell 22% to $23 million, or 52 cents a share. Year-earlier earnings before a charge were $29.6 million, or 60 cents.
Tower Air Inc. reported second-quarter net profit of $3.6 million, or 23 cents a share, compared with $2.9 million, or 19 cents, a year ago.
Tupperware Corp. said second-quarter profit fell 22% to $38 million, or 61 cents a share, from $48.9 million, or 77 cents, a year earlier.
Dana Corp.’s second-quarter earnings rose 2.5% to $93.8 million, or 90 cents a share, from $91.5 million, or 90 cents a share, a year ago.
