IBM CEO Arvind Krishna
Shares of IBM rose 3% in extended trading on Tuesday, after the technology services company released first-quarter results that exceeded expectations.
See how the company did it:
- Profits: $ 1.40 per share, adjusted, compared to $ 1.38 per share as expected by analysts, according to Refinitiv.
- Income: $ 14.2 billion, up from $ 13.85 billion as expected by analysts, according to Refinitiv.
Revenue for the period increased 7.7% from a year earlier, IBM said in a statement. This is the first full quarter of the company without the management of infrastructure services acquired in an entity called Kyndryl. Sales at Kyndryl added 5 percentage points to quarterly revenue growth.
Net income from continuing operations increased by 64% over the previous year to $ 662 million. Total net income decreased by 23%.
IBM has called for a steady increase in stable single-digit revenue for 2020, with an additional 3.5 percentage points increase from Kyndryl.
In the first quarter, IBM’s software division generated $ 5.77 billion in revenue, up 12% from more than $ 5.63 billion in consensus among analysts surveyed by StreetAccount.
Revenue from consulting services rose 13% to $ 4.83 billion, higher than the $ 4.6 billion StreetAccount consensus.
Infrastructure revenue fell 2% to $ 3.22 billion as customers prepare for IBM’s next-generation server later this year.
Also during the quarter, IBM said Francisco Partners had agreed to buy Watson Healthcare and Analytics data in a deal worth more than $ 1 billion. IBM has released up-to-date data for its high-profit software division to better reflect its financial data without these companies.
In early March, IBM announced that it had ceased operations in Russia following the country’s invasion of Ukraine. IBM also announced the acquisitions of environmental data analytics software company Envizi and telecommunications consulting firm Sentaca.
IBM shares outperformed the S&P 500 this year, falling about 3% since closing on Monday, while the broader index fell 6%. Investors have been converted into stocks of value in 2022, given rising interest rates and the war in Europe.
Executives will discuss the results with analysts in a teleconference starting at 5 p.m. ET.
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IBM 1st Quarter 2022 Profits
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