IBM shares jumped as much as 7% in extended trading on Monday after the software and services company said revenue climbed 6% in the fourth quarter.
Here’s how the company did:
- Earnings: $3.35 per share, adjusted
- Revenue: $16.7 billion
During the period, IBM spun out is managed infrastructure services business into Kyndryl. For IBM’s continuing operations, revenue rose 6% from a year earlier, the company said a statement. Part of the growth comes from sales to Kyndryl.
IBM executives have been telling investors of late to look for mid-single digit revenue growth. In the prior quarter, IBM’s revenue from continuing operations increased by 2%. The company showed its fastest revenue growth since the third quarter of 2011.
Net income in the fourth quarter jumped 72% from a year earlier to $2.33 billion increased, while gross margin narrowed to 56.9% from 58.9%.
IBM streamlined its reporting segments for the fourth quarter in conjunction with the Kyndryl separation. Its software business, formerly known as Cloud and Cognitive Software, generated $7.27 billion in revenue, up 8% from a year earlier.
Revenue in the consulting unit, previously named Global Business Services, rose 13% to $4.75 billion. The IBM infrastructure business, which includes hardware, was down 0.3% to $4.41 billion.
As of the close on Monday, IBM shares are down 4% since the start of the year, while the S&P 500 is down 8%.
In addition to completing the Kyndryl transaction, IBM announced during the period the acquisitions of Australian cloud consulting company SXiQ and a consulting unit that handles Adobe implementations. It also announced a vertical semiconductor transistor architecture alongside Samsung.
Executives will discuss the results and expectations for the year with analysts on a conference call starting at 5 p.m. ET.
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