IBM beats Q2 earnings with continued cloud growth

The slide was somewhat inevitable, as CEO Ginni Rometty took on the unenviable task of trying to modernize the company and started selling off commoditized businesses she saw as being marginal to IBM’s future. (IBM) is slated to release its second-quarter numbers after the bell today, July 18. Analysts’ estimate typically exclude certain special items.

IBM’s second quarter results mark the company’s 17th straight quarter decline.

During the second quarter, IBM introduced Watson for Cyber Security, a knowledge base of security information; and Watson Company Analyzer, meant to help companies build relationships and assess competitors, Schroeter said.

While earnings are expected to fall again, the first quarter may have been the bottom. Altogether, the company estimates about a $2 billion rise in pre-tax profit from first to second quarter.

However, non-GAAP net income is $2.8 billion, down 25% from a year ago (GAAP net income was $2.5 billion, now 29%).

Overall, the company brought in $20.2 billion in revenue in the second quarter-just shy of the $20.6 billion it brought in during the same quarter a year ago. So far, IBM has acquired 11 companies, many of which represent new growth areas for the company. The company expects GAAP earnings per share of at least $12.35.

The 2016 non-GAAP operating earnings expectation excludes $1.15 per share of charges for amortization of purchased intangible assets, other acquisition-related charges and retirement-related charges.

More important to customers is that the 38 percent of IBM revenue that the company defines as “strategic imperatives” was up 12 percent year to year.