IBM Common Stock (NYSE:IBM) stock rose 4.30% (As on July 25, 11:21:36 AM UTC-4, Source: Google Finance) after the company reported second-quarter results that surpassed analysts’ predictions. Net income of $1.83 billion, or $1.96 per share, was up from $1.58 billion, or $1.72 per share, a year earlier. The company’s book of business for generative artificial intelligence now stands above $2 billion. The number was over $1 billion in April. IBM said its software business brought in revenue of $6.74 billion, up 7% and more than the StreetAccount consensus of $6.49 billion. The consulting unit contributed $5.18 billion in revenue. That was down 0.9% and below the $5.23 billion StreetAccount consensus. IBM’s infrastructure segment that contains mainframe computers posted $3.65 billion in revenue, up 0.8% and higher than the $3.51 billion consensus. The revenue performance for the current z16 mainframe computer is still outperforming earlier cycles, said IBM’s finance chief, Jim Kavanaugh. During the quarter, IBM announced its intent to acquire HashiCorp in a deal with a $6.4 billion enterprise value. IBM also said Palo Alto Networks  had agreed to buy IBM’s QRadar cloud software and migrate customers to the Cortex Xsiam product. Additionally, IBM announced plans for data center infrastructure in Montreal.

IBM in the second quarter of FY 24 has reported the adjusted earnings per share of $2.43, beating the analysts’ estimates for the adjusted earnings per share of $2.20, according to LSEG. The company had reported the adjusted revenue growth of 1.9 percent to $15.77 billion in the second quarter of FY 24, beating the analysts’ estimates for revenue of $15.62 billion.

Additionally, in the second quarter, the company generated net cash from operating activities of $2.1 billion, down $0.6 billion year to year. IBM’s free cash flow was $2.6 billion, up $0.5 billion year to year. The company returned $1.5 billion to shareholders in dividends in the second quarter. IBM ended the second quarter with $16.0 billion of cash, restricted cash and marketable securities, up $2.5 billion from year-end 2023. Debt, including IBM Financing debt of $11.1 billion, totaled $56.5 billion, flat year to date.

The company now expects 2024 free cash flow to come in above $12 billion. In April, executives were calling for about $12 billion. The company continues to expect constant currency revenue growth consistent with its mid-single digit model. At current foreign exchange rates, currency is expected to be about a one to two-point headwind to revenue growth.