(San Francisco) U.S. computer giant IBM outperformed market expectations in the second quarter, but admitted on Monday that the strong dollar was having a big impact on its financial performance.
Posted at 8:48 p.m.
Its title lost more than 4% during electronic trading after the closing of the New York Stock Exchange.
The American group published a turnover of 15.5 billion for the period from April to June, up 9% over one year.
But “exchange rates have cut our revenues by 6 points of growth, or $900 million,” noted James Kavanaugh, chief financial officer, during a conference call with analysts.
The dollar, a safe haven, has been strengthened in recent weeks by the tightening of monetary policy in the United States and by fears about growth in Europe. Euro-dollar parity was even reached last week, for the first time since 2002.
IBM is also suffering from its withdrawal from Russia, linked to the war in Ukraine. “Leaving was the right decision, but our activity there was very profitable,” said Arvind Krishna, the group’s boss.
“It’s going to cost us about $200 million in free cash flow and profit in 2022.”
The company, driven in particular by its remote computing (cloud) and consulting services, generated 1.4 billion in net profit in the second quarter.
“Our consulting business, which represents more than half of our staff, is the most affected by the rising cost of labor, as we continue to recruit,” said the leader.
Rampant inflation in the United States has forced companies to raise wages and, in some cases, slow the pace of hiring.