IBM Research Vice President and Director Arvind Krishna speaks on stage during the June 16, 2016 Wired Business 2016 conference in New York.
Brian Ach | Getty Images
IBM shares rose 4% in extended transactions on Monday after the company’s technology and services maker reported first-quarter earnings that came in better than analysts expected.
Here’s how the company did it:
- Earnings: $ 1.77 per share, adjusted, compared to $ 1.63 per share, as expected by analysts, according to Refinitiv.
- Income: $ 17.73 billion, compared to $ 17.35 billion, as expected by analysts, according to Refinitiv.
Revenues rose 0.9% year-on-quarter year-on-year from a 6% drop in the previous quarter. The company reiterated previous revenue growth guidelines for the full year.
IBM Global Technology Services, which handles managed services, outsourcing and support, contributed $ 6.37 billion in revenue. Its revenues fell 1% year-on-year, but exceeded the FactSet 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 IBM Cloud and Cognitive Software division, which includes Red Hat, came in with $ 5.44 billion in revenue, up 4% and above the $ 5.30 billion FactSet consensus. IBM reported capital expenditures of $ 529 million in the quarter, down 28%.
Global Business Services, the unit that includes consulting, contributed $ 4.23 billion in revenue, up 2% to $ 4.03 billion in consensus.
Systems revenue of $ 1.43 billion from sales of mainframe computers and other hardware increased 4% and over the consensus estimate of $ 1.29 billion.
In the following quarter, IBM announced that it was acquiring 7Summits, a consulting firm for Salesforce, from private equity firm Sverica Capital Management, and that it was buying Taos, a consulting firm working on cloud migration. IBM also said it has sold 250 patents to food delivery company Instacart.
With the exception of the move after the program, IBM shares have increased by about 6% since the beginning of 2021, while the S&P 500 index has increased by almost 11% over the same period.
This is breaking news. Please check again for updates.
CLOCK: Watch CNBC’s full interview with IBM CEO Arvind Krishna and Cleveland Clinic CEO Dr. Tomislav Mihaljevic