SVP and Director at IBM Research Arvind Krishna speak onstage at the 2016 Wired Business Conference on June 16, 2016 in New York City.
Brian Ach | Getty Images
IBM shares rose 4% in expanded trading Monday after the enterprise technology and services manufacturer reported first-quarter earnings that came in better than analysts had expected.
This is how the company did it:
- Merits: Adjusted $ 1.77 per share versus $ 1.63 per share as expected by analysts, Refinitiv said.
- Revenue: $ 17.73 billion, versus $ 17.35 billion as expected by analysts, according to Refinitiv.
Sales grew 0.9% year-over-year in the quarter, compared to a 6% decline in the previous quarter, a statement said. The company reiterated previous expectations of revenue growth for the full year.
IBM’s Global Technology Services segment, which deals with managed services, outsourcing and support, contributed $ 6.37 billion in revenue. Revenue fell 1% year over year and more than FactSet’s consensus estimate of $ 6.32 billion. IBM plans to split off part of the segment by the end of the year as a standalone publicly traded company called Kyndryl.
IBM’s Cloud and Cognitive Software division, which includes Red Hat, posted revenue of $ 5.44 billion, up 4% and above the FactSet consensus of $ 5.30 billion. IBM reported $ 529 million in capital expenditures in the quarter, down 28%.
Global Business Services, the unit that includes consulting, contributed $ 4.23 billion in revenues, up 2% and above the consensus of $ 4.03 billion.
System revenue of $ 1.43 billion from sales of mainframe computers and other hardware was 4% higher and higher than the consensus estimate of $ 1.29 billion.
In the quarter, IBM announced that it was acquiring 7Summits, a Salesforce consulting firm, from private equity firm Sverica Capital Management, and that it was buying Taos, an advisory group working on cloud migrations. IBM also said it sold 250 patents to the delivery company Instacart.
Excluding the after-hours move, IBM shares are up about 6% since early 2021, while the S&P 500 index has grown nearly 11% over the same period.
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