SVP and Director at IBM Research Arvind Krishna speak on stage during the 2016 Wired Business Conference on June 16, 2016 in New York City.
Brian Oh | Getty Images
IBM shares rose 4% in expanded trading on Monday after the enterprise technology and services maker reported first-quarter earnings that were better than analysts expected.
This is how the company did it:
- Merits: Adjusted for $ 1.77 per share versus $ 1.63 per share as analysts expected, Refinitiv said.
- Revenue: According to Refinitiv, $ 17.73 billion versus $ 17.35 billion as analysts expected.
Revenue for the quarter increased 0.9% on a year-on-year basis, compared to a 6% decrease in the previous quarter. The company reiterated its previous full-year revenue growth forecasts.
IBM’s Global Technology Services segment, which handles managed services, outsourcing and support, contributed $ 6.37 billion to revenue. Revenue was down 1% year over year but was above the FactSet consensus estimate of $ 6.32 billion. IBM plans to outsource part of the segment as a separate public company called Kyndryl by the end of the year.
IBM’s Cloud and Cognitive Software division, which also includes Red Hat, had sales of $ 5.44 billion, up 4% and more than the FactSet consensus of $ 5.30 billion . IBM reported investments of $ 529 million for the quarter, a decrease of 28%.
Global Business Services, the entity that includes consulting, contributed $ 4.23 billion to revenue, up 2% and more than the consensus of $ 4.03 billion.
System revenue of $ 1.43 billion from mainframe computer and other hardware sales increased 4%, above the consensus estimate of $ 1.29 billion.
In the quarter, IBM announced that it had acquired 7Summits, a Salesforce consulting firm, from private equity firm Sverica Capital Management and bought Taos, a consulting group that deals with cloud migrations. IBM also said it had sold 250 patents to the food company Instacart.
Excluding the after-hours move, IBM shares have risen roughly 6% since early 2021, while the S&P 500 index has risen nearly 11% over the same period.
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