IBM today announced second-quarter 2005 diluted earnings per common share of $1.14 from continuing operations, including a $.72 per share of incremental charges related to workforce reductions, a $.45 per share gain on the sale of its Personal Computing business, and $.29 per share of other income due to a settlement agreement entered into with Microsoft. Without these non-recurring items, diluted earnings per share were $1.12 compared with diluted earnings in the second quarter of 2004 of $1.01 per share.
Second-quarter income from continuing operations was $1.85 billion, including the non-recurring pretax items for incremental restructuring charges of $1.7 billion, offset by a $1.1 billion gain on the sale of the PC business, and a $775 million settlement received from Microsoft. Without these non-recurring items, income from continuing operations was $1.82 billion as compared to $1.74 billion in the second quarter of 2004. Total revenues for the second quarter of 2005 of $22.3 billion, which includes $557 million of PC revenue for April 2005, decreased 4 percent (6 percent, adjusting for currency) from the second quarter of 2004. Excluding the revenue from the divested PC business, second-quarter revenues increased 6 percent (4 percent, adjusting for currency) compared with the second quarter of 2004.
Samuel J. Palmisano, IBM chairman and chief executive officer, said: "IBM made several strategic and important transitions in the second quarter. We seamlessly moved our PC business to Lenovo, implemented a streamlined management system in Europe, and restructured important parts of the company for future growth. I am proud of how the IBM team managed these transitions while, at the same time, delivering a solid quarter.
"IBM returned to form in this quarter. In particular, strategic, high-growth businesses -- in Business Performance Transformation Services, software and in key industry sectors and emerging markets -- were among our best-performing operations, achieving double-digit revenue growth. In addition, IBM Business Consulting Services posted an outstanding quarter, with strong revenue growth and a 30 percent increase in signings. This performance reinforces our confidence in our business model, and in our mission to apply unique, high-value skills and solutions to transform our clients'' businesses."
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