IBM Reports First Quarter Results, Beats Wall Street Expectations
IBM has beat Wall Street expectations, returning to revenue growth after four quarters of declines.
IBM has been in the process of reinventing itself as a hybrid cloud provider. The company plans to spin off its legacy operations, focusing primarily on its hybrid cloud business, and has been snapping up startups to help drives its transformation.
The company’s strategy appears to be paying off as it reported revenue of $17.7 billion, up 1%. The company’s Cloud & Cognitive Software was up 4%. Cloud revenue accounted for $6.5 billion, up 21%. Over the past 12 months, cloud revenue accounted for $26.3 billion, an increase of 19%.
13h | Antony Savvas IBM has reported total cloud revenues of $6.5 billion for the first quarter ended 31 March, which is a 21% jump on the same quarter last year.
The company s total group sales for the quarter were $17.7 billion, which was a very modest 1% increase on last year as IBM continued to focus on its newer cloud, AI and software markets - including its acquired Red Hat business.
Big Blue is still preparing to spin off its managed infrastructure services business. Earlier this month, the firm announced that Kyndryl will be the name of the new independent company created, expected to occur by the end of 2021.
IBM s cloud services echo its Q1 financial results: They re both down theregister.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from theregister.com Daily Mail and Mail on Sunday newspapers.
IBM Reports 2021 First-Quarter Results
Highlights
Revenue of $17.7 billion, up 1 percent (down 2 percent adjusting for currency) Cloud Cognitive Software up 4 percent (up 1 percent adjusting for currency) Systems up 4 percent (up 2 percent adjusting for currency) Global Business Services up 2 percent (down 1 percent adjusting for currency)
Total cloud revenue of $6.5 billion, up 21 percent (up 18 percent adjusting for divested businesses and currency) Cloud revenue of $26.3 billion over last 12 months, up 19 percent (up 18 percent adjusting for divested businesses and currency)
Red Hat revenue up 17 percent (up 15 percent adjusting for currency), normalized for historical comparability
GAAP gross profit margin of 46.3 percent, up 120 basis points; Operating (non-GAAP) gross profit margin of 47.3 percent, up 110 basis points
Red Hat and off-prem see growth while revenue, profit down overall Share
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IBM on Thursday reported $20.4bn in revenue for its Q4 2020 earnings results, a decline of six per cent, and $73.6bn for the full year, down 4.6 per cent year-on-year.
That led to profits plummeting by 42 per cent for the year, even after it experienced cloud growth in certain areas. Financial analysts had anticipated something more like $20.67bn on average, leading to disappointment that manifested in an after-hours share price decline of about six per cent.
CEO Arvind Krishna, who took over in April 2020, tried to put a positive spin on things. We made progress in 2020 growing our hybrid cloud platform as the foundation for our clients digital transformations while dealing with the broader uncertainty of the macro environment, he said in a statement. The actions we are taking to focus on hybrid cloud and AI will take hold, giving us confidence we can achieve revenue growth in 2021.