IBM Common Stock (NYSE:IBM) stock fell 6.57% (As on July 19, 11:47:47 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the second quarter of FY 22. Software revenue was up 6 percent, up 12 percent at constant currency (about 7 points from sales to Kyndryl). Consulting revenue was up 10 percent, up 18 percent at constant currency.  Infrastructure revenue was up 19 percent, up 25 percent at constant currency (about 7 points from sales to Kyndryl). Hybrid cloud revenue, over the last 12 months, was of $21.7 billion, up 16 percent, up 19 percent at constant currency. On a consolidated basis, in the second quarter, the company generated net cash from operating activities of $1.3 billion or $2.6 billion excluding IBM Financing receivables. IBM’s free cash flow was $2.1 billion. The company returned $1.5 billion to shareholders in dividends in the second quarter. IBM ended the second quarter with $7.8 billion of cash on hand (which includes marketable securities), up $0.2 billion from year-end 2021. Debt, including IBM Financing debt of $12.3 billion, totaled $50.3 billion, down $1.4 billion since the end of 2021.

IBM in the second quarter of FY 22 has reported the adjusted earnings per share of $2.31, beating the analysts’ estimates for the adjusted earnings per share of $2.29. The company had reported the adjusted revenue growth of 9 percent to $15.54 billion in the second quarter of FY 22, beating the analysts’ estimates for revenue of $15.18 billion.

Moreover, Hybrid Platform & Solutions was up 4 percent, up 9 percent at constant currency (about 1.5 points from sales to Kyndryl). Red Hat up 12 percent, up 17 percent at constant currency, Automation was up 4 percent, up 8 percent at constant currency, Data & AI flat, was up 4 percent at constant currency and Security flat, was up 5 percent at constant currency, Transaction Processing was up 12 percent, up 19 percent at constant currency (about 22 points from sales to Kyndryl) and Software segment hybrid cloud revenue up 14 percent, up 18 percent at constant currency.

The company continues to expect constant currency revenue growth at the high end of its mid-single digit model. It projects an additional 3.5 point contribution from incremental sales to Kyndryl. At mid-July exchange rates, currency is expected to be about a six-point headwind. The company now expects about $10 billion in consolidated free cash flow.