what happened
Shares of IBM (NYSE: IBM) fell 9.9% on Friday after the announcement of the technology giant’s results in the fourth quarter.
Approximately
IBM’s revenue declined 6% year-on-year to $ 20.4 billion. That was slightly lower than the nearly $ 20.7 billion that Wall Street expected.
IBM streamlines its business to focus more on its cloud operations. However, the shift is not progressing as well as many analysts expected. IBM’s total cloud revenue increased by only 10% to $ 7.5 billion, while competitors such as Amazon and Microsoft are expected to deliver much more impressive cloud growth in their upcoming earnings reports.
IBM’s share fell sharply on Friday. Image Source: Getty Images.
In addition, IBM’s adjusted operating income fell 56% to $ 2.07, mainly due to a pre-tax amount of $ 2 billion related to the restructuring efforts. However, the company continued to exchange cash. IBM’s full cash flow for 2020 for the full year recorded $ 10.8 billion.
Now what
IBM CEO Arvind Krishna is asking investors to stay patient while IBM executes its recovery strategy, but the sluggish growth in the company’s cloud is making it harder for shareholders to remain optimistic. Many decided to sell their shares on Friday rather than continue to wait until IBM’s growth would recover.