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IBM earnings beat projections

Associated Press

International Business Machines Corp. rebounded from a previous disappointment by reporting second-quarter earnings Monday that surpassed analysts’ expectations. Improvement in the services division bouyed the results.

In the quarter that ended June 30, IBM showed net profit of $1.83 billion, or $1.12 per share, compared with $1.74 billion, or $1.01 per share, in the previous year.

However, that comparison is skewed because the sale of IBM’s personal computer division to China’s Lenovo Group Ltd. closed on May 1, lowering the figures IBM posted in the remaining two months of the quarter. Looking only at continuing operations, IBM showed a profit of $1.85 billion, $1.14 per share.

Second-quarter revenue was $22.27 billion, down 4 percent from $23.10 billion a year ago. Without the one month of sales in the PC business, IBM’s revenue would have been about $21.70 billion.

Analysts surveyed by Thomson Financial had forecast earnings of $1.03 per share on revenue of $21.96 billion.

• Citigroup Inc., the nation’s largest financial institution, reported second-quarter profits on Monday that were a nickel per share below Wall Street’s expectations. Chief Executive Officer Charles Prince cited “challenging conditions” in the April-June period, including a tough bond market and an interest-rate squeeze.

Citigroup, which is based in New York, reported earnings of $5.07 billion, or 97 cents per share, in the April-June period, up from $1.14 billion, or 22 cents per share, a year earlier. The year-earlier period included a gain on the sale of Citigroup’s stake in the Saudi Arabia-based Samba Financial Group as well as a nearly $5 billion charge for the bank’s settlement of WorldCom Inc. litigation.

Analysts expected Citigroup to earn $1.02 per share on revenue of $21.41 billion, according to a Thomson Financial survey.

• Bank of America Corp., the nation’s third-largest bank, said Monday that its second-quarter earnings rose 12 percent from last year, thanks to growth in card income and service charges. But the bank also reported reduced trading income and tighter interest-rate margins in the April-June period.

Net income rose to $4.3 billion, or $1.06 per share, in the April-June period from $3.85 billion, or 93 cents per share, a year earlier. Revenue rose 7 percent to $14.21 billion from $13.22 billion last year.

The results topped Wall Street expectations for earnings of $1.01 per share on revenue of $14 billion.