The computer dino IBM significantly increased sales in the second quarter thanks to strong demand for cloud software and IT services. But the strong dollar is affecting him.
In the three months to the end of June, revenue increased by 9 percent year-on-year to $15.5 billion, IBM announced on Monday after the US stock market closed. Net income increased to $1.4 billion from $1.3 billion. However, exchange rate effects weigh heavily on the balance sheet. IBM suffers from strong dollar, which reduces foreign earnings after conversion to US currency. Without this negative factor, the increase in sales in the most recent quarter would have been 16 percent.
In view of increased geopolitical risks such as the war in Ukraine, investors are targeting the US dollar as a so-called safe haven on the financial market. In addition, the US Federal Reserve is well ahead of the European Central Bank in its rate hike cycle. All of this allows the dollar to appreciate – a problem for US corporations like IBM, which make a lot of sales on international markets. The business outlook for 2022 as a whole was correspondingly cautious. The stock continued to fall in the after-hours trading, although the quarterly results actually significantly exceeded the average analysts’ expectations.