IBM stock rallies after earnings show surprise revenue gain

This post was originally published on this site

International Business Machines Corp. shares rose in the extended session Tuesday after the technology giant turned in a surprise revenue gain, its first year-over-year sales increase in more than a year.

Revenue rose to $21.78 billion from $21.76 billion in the year-ago quarter, driven by the company’s cognitive solutions and cloud segments. IBM IBM, +0.62%  sales had declined year-over-year for five consecutive quarters, which pales in comparison to a yearslong streak of revenue declines that ended in 2018.

The company reported fourth-quarter net income of $3.67 billion, or $4.11 a share, compared with $1.95 billion, or $2.15 a share, in the year-ago period. Adjusted earnings were $4.71 a share. Analysts surveyed by FactSet had forecast earnings of $4.69 a share and a revenue decline to $21.64 billion.

“We ended 2019 on a strong note, returning to overall revenue growth in the quarter, led by accelerated cloud performance,” said Ginni Rometty, IBM chairman, president and chief executive, in a statement.

See also: Investor behavior is eerily similar to that of January 2018 — a selloff is brewing, warns strategist

IBM reported cloud and cognitive software revenue of $7.24 billion, while analysts expected $7.14 billion, and systems revenue was $3.04 billion versus the $2.83 billion Street view. Global technology services revenue came in at $6.95 billion while the Street expected $7 billion. Global business services revenue was $4.24 billion while the Street had forecast $4.27 billion.

“Looking ahead, this positions us for sustained revenue growth in 2020 as we continue to help our clients shift their mission-critical workloads to the hybrid cloud and scale their efforts to become a cognitive enterprise,” Rometty said.

IBM expects adjusted earnings of “at least $13.35” a share in 2020, while analysts forecast $13.28 a share.

IBM shares rose 3.8% after hours, following a 0.6% rise in the regular session to close at $139.17. In comparison , the Dow Jones Industrial Average DJIA, -0.52%  closed down 0.5%, the S&P 500 index SPX, -0.27%  declined 0.3%, and the tech-heavy Nasdaq Composite Index COMP, -0.19%  slipped 0.2%.

Of the 20 analysts who cover IBM, five have buy or overweight ratings, 13 have hold ratings and two have sell or underweight ratings, with an average price target of $148.53.

Add Comment