International Business Machines recorded the highest quarterly sales growth in more than two years and beat Wall Street targets on Monday, boosted by its stakes in the high-margin cloud computing business.
Shares of the Dow component, which have gained nearly 6 percent so far this year, have risen more than 3 percent in long-term trading.
Finance chief James Cavanaugh said cloud spending by customers in the U.S. retail, manufacturing and tourism industries has been rising since the pandemic initially declined.
Sales of cloud computing services jumped 21% to $ 6.5 billion (approximately 48,560 kroner) for the quarter. The 109-year-old is preparing to split into two public companies, with the company narrowing its focus to the so-called hybrid cloud, where it sees a market opportunity of $ 1 trillion (approximately 74.72,750 kroner).
Big Blue saw a drop in sales of global technology services, its largest unit, but this was largely offset by revenue growth in the other three blocks, including a surprise growth in the business that hosts mainframe computers.
Mainframe saw strong attraction from the financial services sector, where its bank customers were shopping for more capacity when trading volumes rose during the retail craze, CFO Kavanaugh said.
“I’m glad to see that the strategic projects that are At IBM bread and butter are coming back, ”said Patrick Moorhead, analysts at Moor Insights & Strategy, adding that the growth of systems and global business services is a surprise.
“It’s a good start to the year for the company, which is all-in in the cloud.”
Total revenue rose nearly 1% to $ 17.73 billion (approximately Rs. 1.32.500 crore) during the quarter, beating analysts’ average estimates of $ 17.35 billion (approximately Rs. 1.29.650 crore), according to IBES from Refinitiv.
Net income fell to $ 955 million (approximately 7,140 kroner) or $ 1.06 (approximately 80 rupees) per share in the quarter ended March 31 from $ 1.18 billion (approximately 8,820 kroner) or $ 1.31 (approximately 100 rupees). ) per share, a year earlier.
Excluding items, the company earned $ 1.77 (approximately Rs. 130) per share, exceeding market expectations of $ 1.63 (approximately Rs. 120).
© Thomson Reuters 2021
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