Runaway Mainframe Sales Continue to Boost IBM Bottom Line

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IBM announced second-quarter revenues grew by 12% over the same period last year, propelled by mainframe revenues, which grew and a frenetic pace of more than 60%.

Overall, IBM's 2011 net income for the second quarter was $3.7 billion, compared with $3.4 billion in the second quarter of 2010, an increase of 8%. Total revenues for the second quarter of 2011 of $26.7 billion, an increase of 12% from the second quarter of 2010.

"Hardware, software and services revenue grew at double digits, and we achieved strong profit and free cash flow growth," says Samuel J. Palmisano, IBM chairman, president and chief executive officer.

Revenues from System z mainframe server products increased 61% compared with the year-ago period. Total delivery of System z computing power, as measured in MIPS (millions of instructions per second), increased 86%. Overall, revenues from the Systems and Technology segment totaled $4.7 billion for the quarter, up 17% from the second quarter of 2010. Systems revenues increased 20%. This includes revenues from Power Systems, which increased 12% compared with the 2010 period, and revenues from System x, which increased 15%. Revenues from System Storage increased 10%, and revenues from Retail Store Solutions increased 8% year over year.

Revenues from the Software segment were $6.2 billion, an increase of 17%. Revenues from IBM's key middleware products, which include WebSphere, Information Management, Tivoli, Lotus and Rational products, were $3.9 billion, an increase of 21% versus the second quarter of 2010. Operating systems revenues of $630 million increased 16% compared with the prior-year quarter.

Revenues from the WebSphere family of software products increased 55% year over year. Information Management software revenues increased 18%. Revenues from Tivoli software increased 9%. Revenues from Lotus software increased 12%, and Rational software increased 4%.

IBM also reported that its net income for the 6 months ended June 30, 2011 was $6.5 billion, compared with $6.0 billion in the year-ago period, an increase of 9%. Revenues for the 6-month period totaled $51.3 billion, an increase of 10%
compared with $46.6 billion for the 6 months of 2010.

More information is available at the IBM website.