IBM IBM beat Wall Street estimates on earnings again, but came in short of expectations on revenue as it continues to shift its focus away from hardware and toward cloud computing.
First-quarter adjusted earnings came in at $2.25, beating Street estimates of $2.22 per share. Revenue came in at $18.2 billion, short of the Street estimate of $18.5 billion.
The earnings and revenue represented a year-over-year decline from $2.45 a share and $19.1 billion in the same quarter a year ago.
The company issued 2019 adjusted EPS guidance of at least $13.90, just under analysts' $13.91 estimate.
"In the first quarter, our cloud revenue growth accelerated, and we again grew in key, high-value areas in Cloud and Cognitive Software and in consulting," said IBM Chairman, President and CEO Ginni Rometty. "IBM's investments in innovative technologies coupled with our industry expertise and our commitment to trust and security position us well to help clients move to chapter two of their digital reinvention."
Q1 Highlights
- Cloud and Cognitive software revenue of $5 billion, down 2 percent, but up 2 percent when adjusted for currency.
- Global Business Services revenue of $4.1 billion, flat year-to-year.
- Global Technology Services revenue of $6.9 billion, down 7 percent.
- Systems revenue (hardware and operating systems software) of $1.3 billion, down 11 percent.
IBM’s shares are up just a bit over 25 percent year to date. Most analysts believe IBM can expect more growth next year as it begins to realize the fruits of its acquisition of open source cloud software company Red Hat.
Price Action
IBM shares closed up 0.85 percent at $145.14 on Tuesday and were down slightly in after-hours trading.
Related Links:
IBM Rises After Q4 Earnings Beat, Cloud Revenue Up 12%
Analysts Applaud IBM's Move To Make Watson Available Cross-Cloud
Photo credit: Mark Ahsmann (Own work), via Wikimedia Commons
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