IBM beat Q4 expectations, strengthen by cloud services

IBM beat Q4 expectations, strengthen by cloud services


On Tuesday, IBM Corp came up posting higher than expectations results for its fourth-quarter.

Profit for the quarter ended on Dec 31, IBM not only beat Wall Street quarterly earnings estimates but also remained above of forecasted profit, which indicates that efforts of its CEO, Ginni Rometty, to turn around the company, are gaining traction.

The annual revenue growth posted by the IBM was its first since 2011, which also raised the share value by 7 percent in extended treading on Tuesday.

IBM’s earnings for the fourth quarter remained $4.87 per share against analyst expectations of $4.82 per share

IBM generates 60 percent of its revenue from outside the United States and in 2018, strength gained by the dollar cost over $2 billion to the company’s revenue. Though on year-on-year basis, revenue declined by 3 percent but the company beat the analyst estimates by generating quarterly revenue of $21.76 billion vs analysts’ expectations of $21.71 billion.

Building a cloud business, including artificial intelligence, analytics and cybersecurity,  is the area that IBM has been actively looking into as part of its Strategic Imperatives and in 2018 the cloud business, at the pace of 12 percent, over all grew to $19.2 billion.

With expectations to keep on moving with same momentum in 2019, IBM reported its gross profit margin increased to 49.1 percent from 49 percent a year ago.

Other segment of IBM, cognitive software business reported sales of $5.46 billion while analysts were expecting $5.25 billion for the same. Cognitive software business houses analytics, cybersecurity services and Watson, an artificial intelligence platform of the IBM.

Company’s segment of global businesses services also beat the estimates of $4.15 billion by generating revenue of $4.32 billion in the quarter.

During the reported quarter IBM signed its strongest in a long time contracts of worth $16 billion, Chief Financial Officer James Kavanaugh told Reuters.

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I am an independent trader currency and commodity with about eight years of experience. I love the financial world because it is like one big puzzle and I hope we help each other out to solve the puzzle to help us realize our dreams. I received my BBA in Accounting (With Honors) - from The University of Texas - San Antonio. Achievements: Beta Alpha Psi National Accounting Honors Fraternity member, Leadership Challenge Participant, Dean's List. I have passed the Series 63, 22, Texas Real Estate exam, and the DRI Business Continuity exam.