IBM Research Vice President and Director Arvind Krishna speaks on stage during the 2016 Wired Business Conference on June 16, 2016 in New York City.
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IBM shares rose 4% in extended trading on Monday after technology and business services maker reported first-quarter gains that came in better than analysts expected.
Here’s how the company did it:
- Earnings: $ 1.77 per share, adjusted, versus $ 1.63 per share, as analysts expected, according to Refinitiv.
- Income: $ 17.73 million, up from $ 17.35 billion, as analysts expected, according to Refinitiv.
According to a statement, revenue grew 0.9% in annualized terms during the quarter, compared to a 6% decline in the previous quarter. The company reiterated previous guidelines on year-over-year revenue growth.
IBM’s global technology services segment, which manages managed services, outsourcing and support, contributed $ 6.37 million in revenue. Its revenues fell 1% year-over-year and exceeded FactSet’s consensus estimate of $ 6.32 billion. IBM plans to separate part of the segment as an independent public company called Kyndryl by the end of the year.
The cognitive software and IBM division, which includes Red Hat, grossed $ 5.45 billion, 4% more than the $ 5.30 million Factset consensus. IBM reported $ 529 million in capital expenditures during the quarter, down 28%.
Global Business Services, the unit that includes consulting, contributed $ 4.232 billion in revenue, up 2% and surpassing consensus of $ 4.03 million.
Systems revenue of $ 1.44 billion, from sales of mainframes and other machinery, increased 4% and exceeded the agreed estimate of $ 1.292 billion.
During the quarter, IBM announced that it was acquiring 7Summits, a consulting firm Salesforce, from private equity firm Sverica Capital Management, and that it was buying Taos, a consulting group working in cloud migrations. IBM also said it had sold 250 patents to grocery delivery company Instacart.
Excluding the movement outside working hours, IBM shares have risen around 6% since the beginning of 2021, while the S&P 500 index has grown by almost 11% in the same period.
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