IBM Shares Jump 6% On Earnings Beat

IBM stock

International Business Machines Corp. (NYSE: IBM)

IBM stock rose in after-hours trading on Tuesday after the company reported fiscal 2018 fourth-quarter earnings that were ahead of Wall Street expectations.

Increased revenues in its newer segments such as software and cloud partially tapering revenues of its newest mainframe computers. Shares of the Armonk, NY-based firm gained $8.48, or 6.92% to $131.00 after closing the regular session with a loss of 1.05%.

IBM Earnings & Outlook

The tech giant announced fourth-quarter earnings of $1.95 billion, or $2.15 per share, up from a loss of $1.05 billion, or $1.14 per share, in the same period last year. Adjusted earnings for the three months to December 2018 came to $4.87 per share. Excluding certain items, analysts expected earnings of $4.82 per share, according to figures compiled Refinitiv.

Total revenues for the quarter were $21.76 billion, compared with $22.54 billion in the prior year quarter. Analysts surveyed by Refinitiv had called for revenue of $21.71 billion for the quarter. The Global Business Services unit generated revenues of $4.3 billion, beating estimates of $4.15 billion, while the Global Financing business contributed $402 million in revenue, missing expectations of $426 million.

IBM’s Systems business posted $2.6 billion in revenue, below expectations of $2.77 billion. The Technology Services and Cloud Platforms business had revenues of $8.9 billion, while analysts were for revenues of $9.04 billion. Cognitive Solutions segment posted $5.5 billion in revenue, exceeding forecasts of $5.27 billion.

For the full year, IBM is expecting adjusted earnings of at least $13.90 per share, slightly above Wall Street estimates of $13.80 per share.

IBM CEO Comments

“In 2018 we returned to full-year revenue growth, reflecting growing demand for our services and leadership solutions in hybrid cloud, AI, analytics and security,” said Ginni Rometty, IBM chairman, president and chief executive officer. “Major clients worldwide, such as BNP Paribas, are turning to the IBM Cloud and our unmatched industry expertise to transform their businesses and drive innovation.”

International Business Machines Corp. Profile

International Business Machines Corp. is an information technology company, which provides integrated solutions that leverage information technology and knowledge of business processes. It operates through the following segments: Cognitive Solutions, Global Business Services, Technology Services & Cloud Platforms, Systems, and Global Financing. The Cognitive Solutions segment comprises a portfolio of capabilities that help IBM’s clients to identify actionable insights and inform decision making for competitive advantage.

The Global Business Services segment provides clients with consulting, application management and global process services. The Technology Services & Cloud Platforms segment provides IT infrastructure services creating business value for clients through integrated services that incorporate intellectual property within its global delivery model. The Systems segment provides clients with infrastructure technologies to help meet the requirements of hybrid cloud and cognitive workload from deploying analytics.

The Global Financing segment facilitates IBM clients acquisition of information technology systems, software and services by providing financing solutions in the areas where the company functions. The company was founded by Charles Ranlett Flint and Thomas J. Watson Sr. on June 16, 1911 and is headquartered in Armonk, NY. – CNN Money