Menu
IBM's cloud business on the rise

IBM's cloud business on the rise

Revenue from the cloud business is crucial as IBM pivots away from its established businesses

Credit: Dreamstime

IBM has forecast full-year profit above market expectations after reporting surprise growth in quarterly revenue, boosted by its high-margin cloud computing business, sending its shares up more than 4 per cent.

Revenue from the cloud business, which is crucial as IBM pivots away from its established businesses including mainframe servers, rose 21 per cent to US$6.8 billion in the fourth quarter ended 31 December.

Over the past few years, CEO Ginni Rometty has been trying to shift the company's focus to the cloud through acquisitions and also by selling some of IBM's legacy businesses.

IBM bought Linux maker Red Hat Inc in a US$34 billion deal last year, its biggest acquisition so far, in a push to expand its subscription-based software business and counter falling software sales and declining demand for mainframe servers.

The company forecast an adjusted profit of at least US$13.35 per share for the year, compared with estimate of US$13.29.

IBM had changed its reporting structure last year – its two biggest segments now are cloud and cognitive software, and global technology services.

Revenue from the cloud and cognitive software segment, which includes Red Hat, rose 8.7 per cent to US$7.2 billion.

IBM has said that it would report only a portion of Red Hat's actual revenue for some quarters, while recording all its expenses as required by US accounting standards.

The global technology services segment, which caters to some of the world's largest data centers, reported $6.9 billion of revenue, down 4.8 per cent from the previous year.

IBM recorded a marginal increase of 0.1 per cent in overall revenue to US$21.78 billion in the quarter, its first rise in six quarters. Analysts on average had expected a drop of nearly 1 per cent, according to IBES data from Refinitiv.

Excluding special items, it earned US$4.71 per share, above analysts' expectation of US$4.69.

(Reporting by Munsif Vengattil in Bengaluru; Editing by Maju Samuel)


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags IBM

Featured

Slideshows

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards

Hundreds of leaders from the New Zealand IT industry gathered at the Hilton in Auckland on 17 November to celebrate the finest female talent in the Kiwi channel and recognise the winners of the Reseller News Women in ICT Awards (WIICTA) 2020.

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards
Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards

Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards

The leading female front runners of the New Zealand ICT industry joined together for the annual Reseller News Women in ICT Awards event at the Hilton in Auckland, during which hundreds of guests celebrated 13 outstanding individuals who won awards, chosen from more than 50 finalists representing over 30 organisations.

Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards
Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners

Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners

More than 500 channel leaders gathered in Auckland on 21 October at the ​Reseller News Innovation Awards ​2020 to celebrate the achievements of the New Zealand technology industry's top partners, start-ups, vendors, distributors and individuals.

Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners
Show Comments