After last evening's impressive earnings announcement, technology giant International Business Machines (NYSE:IBM) can proudly tout the international piece of its name. With close to $100 billion in annual revenue, Big Blue probably runs into every player in the technology sector. Thanks to a global footprint, its size isn't stopping it from growing briskly, as second-quarter sales grew 9% and earnings advanced a healthier 15%.
Faster-growing overseas markets and a weak U.S. dollar are boosting results at most geographically diversified Blue Chip companies, be it Yum! Brands, Coca-Cola, or Johnson & Johnson. IBM is no exception and is even seeing decent growth closer to home as Americas revenue improved 6% for the second quarter.
As you might have guessed, Asia/Pacific revenue advanced 10% while IBM's Europe/Middle East/Africa geographic segment shot up 13%, with currency benefits contributing more than half of that number. From a business perspective, the global services and software units also saw double-digit top-line gains, and it's no secret management wants to increase its exposure to these highly profitable categories. On July 8, it announced its latest software move -- the acquisition of privately held DataMirror.
The earnings press release highlighted management's strategy to grow earnings through 2010 by focusing on "emerging markets, acquisitions and service oriented architecture opportunities." Second-quarter results definitely "underscored" this strategy as growth stemmed from these three key areas.
As time goes on, IBM may begin increasingly to cross paths with software titans Microsoft (NASDAQ:MSFT), Oracle (NASDAQ:ORCL), and SAP (NYSE:SAP) overseas. However, there's a silver lining here: It may bump into Hewlett-Packard (NYSE:HPQ), Lenovo, and Sun Microsystems (NASDAQ:SUNW) less at it moves away from its lower-margin systems and hardware businesses.
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Coca-Cola and Microsoft are Motley Fool Inside Value recommendations. Johnson & Johnson is a Motley Fool Income Investor pick.
Fool contributor Ryan Fuhrmann is long shares of Microsoft and J&J but has no financial interest in any other company mentioned. Microsoft is an Inside Value recommendation. Feel free to email Ryan with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.
