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International Business Machines Corp. recorded the highest quarterly sales growth in more than two years and hit Wall Street targets on Monday, complemented by its high-margin cloud computing commitment.
Shares of the Dow component, which have risen nearly 6% so far this year, have risen more than 3% in expanded trading.
Chief Financial Officer James Kavanaugh said customer cloud spending in the retail, manufacturing and travel industries in the United States was increasing after the initial pandemic-driven slump.
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Sales of its cloud computing services rose 21% to $ 6.5 billion in the quarter. The 109-year-old firm is splitting itself into two public companies, with the namesake focusing on the so-called hybrid cloud, where it sees a $ 1 billion market opportunity.
Big Blue recorded a decline in sales in global technology services, its largest unit, but this was largely offset by an increase in revenue in the remaining three units, including a surprising growth in the enterprise that houses mainframe computers.
International Business Machines Corp. recorded the highest quarterly sales growth in more than two years and hit Wall Street targets on Monday, complemented by its high-margin cloud computing commitment.
Mainframe received a strong pull from the financial services industry, where its banking customers sought more capacity as trading volumes soared during the retail frenzy, CFO Kavanaugh said.
“I’m glad to see strategic projects coming back, which are IBM’s bread and butter,” said Patrick Moorhead, analysts at Moor Insights & Strategy, adding that the growth of systems and global business services was a surprise.
“This is a great start to the year for the company that is the all-in-the-cloud.”
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Total revenue rose nearly 1% to $ 17.73 billion in the quarter, beating analysts’ average estimate of $ 17.35 billion, according to IBF data from Refinitiv.
Net income ended the quarter ended March 31 at $ 955 million, or $ 1.06 per share, from $ 1.18 billion, or $ 1.31 per share, a year earlier.
Excluding the items, the company earned $ 1.77 per share, beating the market expectation of $ 1.63.