IBM SHARES JUMP AS FIRM SCORES BIGGEST REVENUE GROWTH SINCE 2018
International Business Machines Corp. (IBM) shares jumped in extended trading after the company reported its biggest revenue gain in eleven quarters, driven by demand for cloud services and suggesting Chief Executive Officer Arvind Krishna’s turnaround plan is starting to bear fruit, Jacqueline Davalos reported for Bloomberg News.
Sales increased 1% to $17.7 billion in the three months ended Mar. 31, the Armonk, New York-based company said Monday in a statement. That beat the $17.3 billion analysts had forecast, on average, according to data compiled by Bloomberg.
IBM reported first-quarter revenue growth in three of its five business segments, including Cloud and Cognitive Software, which saw a sales increase of 3.8% from a year earlier to $5.4 billion.
The Global Business Services unit, which includes consulting, and the Systems unit, which includes hardware and operating systems software, also posted year-over-year sales increases.
The shares increased as much as 4.9% in late trading, after closing at $133.12 in New York. The company has gained 5.8% so far this year compared with an increase of 11% for the S&P 500.
April marks a full year at the helm for Krishna, who took over as CEO from Ginni Rometty with plans to focus on artificial intelligence and the cloud to revive growth after years of stagnation.
Krishna has reorganized the 109-year-old tech giant around a hybrid-cloud strategy, which allows customers to store data in private servers and on multiple public clouds, including those of rivals Amazon.com Inc. and Microsoft Corp. Total cloud revenue increased 21% to $6.5 billion in the first quarter.
Krishna said he is “confident” IBM will deliver revenue growth in the second quarter and the rest of the year.
“We will exit 2021 in a stronger position than we started,” he said on a conference call after the results were released.