Software and services fueled IBM's growth in the second quarter of 2011, the company announced on Monday.
For the quarter ended June 30, IBM reported revenue of US$26.7 billion, up 12 percent from the same quarter last year. GAAP net income was $3.7 billion, up 8 percent. Non-GAAP net income of $3.8 billion, an 11 percent increase from the year before. Earnings per share were $3 by GAAP estimates, and $3.09 by non-GAAP accounting. (GAAP stands for "generally accepted accounting principles".)
With these results, IBM beat analysts' estimates, which forecast that the company would bring in $25.345 billion in revenue, with $3.7 billion in net income, according to a poll by Thomson Financial.
Overall, both software and systems grew by 17 percent. Revenue from software provided $6.2 billion. IBM's key middleware products alone, such as WebSphere, Tivoli, Lotus and Rational, brought in $3.9 billion, a jump of 21 percent.
On the hardware side, the Systems and Technology segment generated $4.7 billion for the quarter. System z mainframe revenue grew by 61 percent; and MIPS systems sales enjoyed an 86 percent growth. Power System sales grew 12 percent from last year.
Services revenue growth trailed behind the rate for software and system sales, though it still grew at 10 percent. The company reported a backlog of $144 billion of work that has been booked, up by $15 billion from a year ago. Revenue from the Global Technology Services segment increased 11 percent to $10.2 billion and Global Business Services revenue rose 9 percent to $4.9 billion.
In March, IBM launched a new e-commerce practice which it said would address the growing market for bringing computational capabilities to retail businesses. It expects this division to generate $70 billion in software sales by 2015. With the help of partners, the company has also been tailoring its software for small and medium-size businesses. The company also released the latest version of its WebSphere application server in June. In July, IBM launched its latest mainframe, the zEnterprise 114.
The company is also celebrating the 100th year anniversary of its founding.