Dubai, United Arab Emirates - 19 Jul 2011:
* Diluted EPS:
* GAAP: $3.00, up 15 percent;

Operating (non-GAAP): $3.09, up 18 percent;
* Revenue: $26.7 billion, up 12 percent, up 5 percent adjusting for currency;

Net income:
GAAP: $3.7 billion, up 8 percent;
Operating (non-GAAP): $3.8 billion, up 11 percent;

Pre-tax income:
GAAP: $4.9 billion, up 7 percent;
Operating (non-GAAP): $5.0 billion, up 10 percent;

Gross profit margin:
GAAP: 46.4 percent, up 0.9 points;
Operating (non-GAAP): 46.8 percent, up 1.2 points;

Software revenue up 17 percent, 10 percent adjusting for currency;
Systems and Technology revenue up 17 percent, 12 percent adjusting for currency:
System z mainframe revenue up 61 percent; MIPS up 86 percent;
Power Systems up 12 percent;
Services revenue up 10 percent, 2 percent adjusting for currency;
Services backlog of $144 billion, up $15 billion;
Growth markets revenue up 23 percent, 13 percent adjusting for currency;
Business analytics revenue up more than 20 percent in the first half;
Smarter Planet revenue up more than 50 percent in the first half;
Cloud revenue on track to double in 2011;

Full-year 2011 Operating (non-GAAP) EPS expectations raised to at least $13.25 from at least $13.15.

IBM (NYSE: IBM) today announced second-quarter 2011 diluted earnings of $3.00 per share, compared with diluted earnings of $2.61 per share in the second quarter of 2010, an increase of 15 percent. Operating (non-GAAP) diluted earnings were $3.09 per share, compared with operating diluted earnings of $2.62 per share in the second quarter of 2010, an increase of 18 percent.

Second-quarter net income was $3.7 billion compared with $3.4 billion in the second quarter of 2010, an increase of 8 percent. Operating (non-GAAP) net income was $3.8 billion compared with $3.4 billion in the second quarter of 2010, an increase of 11 percent.

Total revenues for the second quarter of 2011 of $26.7 billion increased 12 percent (5 percent, adjusting for currency) from the second quarter of 2010.

"In the second quarter our long-term strategic investments in the company's growth initiatives again helped drive strong revenue performance," said Samuel J. Palmisano, IBM chairman, president and chief executive officer. "Hardware, software and services revenue grew at double digits, and we achieved strong profit and free cash flow growth.

"As IBM begins its second century, we continue a process of transformation, positioning the company to lead in the future and deliver higher value to our clients and our shareholders. Given our strong start to 2011, we are raising our full-year operating earnings per share expectations to at least $13.25."

Financing
Global Financing segment revenues decreased 5 percent (11 percent, adjusting for currency) in the second quarter to $519 million. Pre-tax income for the segment increased 7 percent to $496 million.