Earnings of technology conglomerate IBM (IBM) rose 3% in the second quarter, as strong cloud revenue lifted the top line. Earnings adjusted for special items increased by 4.8%. Shares of IBM rose 0.95% in the after-hours trading as its outlook remained unchanged.
Net income rose 5.6% to $2.63 per share during the quarter. Excluding one-time items, operating earnings increased to $3.08 per share. First quarter revenues grew 4% year-on-year to $20 billion, continuing the rebound that began two quarters earlier.
The diversified tech giant maintained its outlook for full-year adjusted operating income of at least $13.80 per share and net earnings of at least $11.60 per share. The outlook remained in line with the consensus estimate. The company continues to expect free cash flow of about $12 billion in fiscal 2018.
Driving the overall top-line growth, revenues of the Strategic Imperatives segment rose 15% to $39 billion, with cloud revenue jumping 23% annually.
Segment wise, Cognitive Solutions revenue remained flat, while Global Business Services revenue moved up 2%. Revenue of Technology Services & Cloud Platforms rose 2%, while that of Systems jumped 25%. Meanwhile, Global Financing revenue declined 5% during the quarter.
Cloud computing, analytics, and artificial intelligence remained the main growth areas for IBM that replaced its legacy businesses. Revenue from analytics increased 7%, Mobile revenue rose 5%, and revenue from security jumped 81%.
Among IBM’s rivals in the software business, Oracle (ORCL) reported adjusted earnings of $0.99 per share in the fourth quarter, up 11% compared to the prior-year quarter. Microsoft (MSFT) is scheduled to report its fourth-quarter earnings on July 19.
Shares of IBM ended Wednesday’s regular trading session up 0.72% at $144.52 on the NYSE. The stock had been trading between $137.45 and $171.13 for the past 52 weeks.