IBM Corp. (IBM) shares were markedly higher in the marketing Wednesday after the iconic software company had a stronger than expected fourth-quarter earnings and said the latest acquisition of Red Hat Inc. (RHT) would help increase cloud computing sales by 2019.
IBM said the adjusted earnings for the three months ending in December came to $ 4.87 per share. share, down 5% from the same period last year, but ahead of Street Consensus at $ 4.82 per share. Group sales were also softer than the previous period, falling 1% to DKK 21.76 billion. USD, but the figure topped estimates, and IBM said it sees free cash flow for 2019 at around $ 12bn. Dollars, broadly in line with its progress in the past year. 1
"We see the strong bookings that Red Hat recently reported as further evidence of client confidence in the value," said IBM CFO Jim Kavanaugh to investors on a conference call late Tuesday. "Remember, the quarter ended one month after the transaction was announced. From a value perspective, we see beyond the growing Red Hat business itself that we can lift all of IBM by selling more of our own IBM Cloud and by selling more of our analysis and AI opportunities on OpenShift across multiple platforms. "
IBM shares were marked 6% higher in the market market Wednesday, indicating an opening price of $ 132.87 each, a step that would trim the inventory three months down to about 10.5% and the value of Armonk, the New York-based group at just over $ 118 billion.
IBM said sales in the Global Business Services division increased 6% in a fixed currency to $ 4.3 billions, while gross margins fluctuated by 300 basis points. Its Cognitive Division saw an increase of 2.2% in revenue, returning by 5% in the previous quarter as the AI demand began to accelerate.
Technology services and Cloud Platforms revenue was essentially flat compared to last year
In October, IBM CEO Ginni Rometty called the purchase of Raleigh, North Carolina-based Red Hat acquisition a "game changer" when she announced a $ 34 billion in October turnover, "IBM becomes the world's second largest cloud provider offering companies the only open cloud solution that will unlock the full value of the cloud for their businesses."