SVP and IBM Research Director Arvind Krishna speak on stage during the 2016 Wired Business Conference on June 16, 2016 in New York City.
Brian Ach | Getty Images
IBM shares rose 4% in extended trading on Monday after the company’s technology and services maker reported first-quarter earnings that came in better than analysts had expected.
Here’s how the business fared:
- Earnings: According to Refinitiv, $ 1.77 per share was adjusted, compared to $ 1.63 per share as expected by analysts.
- Income: According to Refinitiv $ 17.73 billion, compared to $ 17.35 billion as expected by analysts.
Revenue grew 0.9% year-on-year in the quarter, compared with a 6% decline in the previous quarter, according to a statement. The company repeated the previous guidance on full-year revenue growth.
IBM’s Global Technology Services segment, which manages managed services, outsourcing and support, contributed $ 6.37 billion in revenue. Revenue fell 1% year-on-year, exceeding the $ 6.32 billion FactSet consensus estimate. IBM plans to eliminate part of the segment by the end of the year as an independent public company called Kyndryl.
IBM’s 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 $ 529 million in capital expenditures in the quarter, down 28%.
Global Business Services, the unit that includes consulting, contributed $ 4.23 billion in revenue, up 2% and above the $ 4.03 billion consensus.
System revenue of $ 1.43 billion from sales of mainframe computers and other hardware increased 4% to above the $ 1.29 billion consensus estimate.
In the quarter, IBM announced that it was acquiring 7Summits, a sales firm from Salesforce, from private equity firm Sverica Capital Management, and that it was acquiring Taos, a cloud migration consulting group. IBM also said it had sold 250 patents to grocery delivery company Instacart.
Excluding the after-hours move, IBM shares have risen by about 6% since the beginning of 2021, while the S&P 500 index has grown by almost 11% over the same period.
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