IBM's consulting segment posted $647 million in second-quarter profit, up 15.1% from $562 million a year earlier, even as revenue edged up just 0.2% to $5.327 billion, according to results and a quarterly filing dated July 22. IBM attributed the improvement primarily to productivity actions, partly offset by investment in innovation, and consulting gross margin also improved to 28.9% from 27.5%. Consulting signings rose 5% as reported, with a trailing book-to-bill ratio of 1.05, though signings are management estimates rather than a standardized revenue measure. At the reported revenue base, one percentage point of consulting margin equals $53.3 million of quarterly segment profit, so a one-point retreat would absorb more than three-fifths of the quarter's $85 million year-over-year profit gain. Repeating 15% profit growth with a flat margin would require roughly 15% revenue growth, or, with flat revenue, a segment margin rise from about 12.1% to 14.0%.
International Business MachinesIBM's consulting segment profit rose 15.1% to $647M on productivity actions and improved gross margin, despite only 0.2% revenue growth.
