IBM (finally) raises revenue after nearly 6 years

The last time IBM reported revenue growth from a prior year was in Q1 2012, which was Ginni Rometty's first as CEO.

IBM's total revenues declined for 22 quarters in a row, according to CNBC, but in the fourth quarter of 2017, that streak ended with the first quarter of year-over-year revenue growth in years.

The corporate-technology giant is remaking itself and investing heavily in new businesses like cloud computing, data analytics and artificial intelligence.

"2018 will be all about reinforcing IBM's leadership position in key high-value segments of the IT industry, including cloud, AI, security and blockchain." said Kavanaugh.

Revenues for the quarter (GAAP) were $22.54 billion, up 4% from the same time past year.

Revenue from IBM's cloud business jumped 30 percent in the latest quarter. IBM's as-a-service run rate for the year rose to $10.3 billion from $8.6 billion at the end of 2016.

Revenue was helped by the weakness of the dollar, since most of IBM's sales are outside the United States.

X Though Big Blue's revenue and earnings beat estimates, its gross margin and operating margin were below views. In the same quarter a year ago, the company reported $21.77 billion in revenue.

But it was revenues that took the most attention as IBM posted sales of $5.4bn (£3.9bn), up from $5.3bn (£3.8bn) a year earlier. These projects represented 46 percent of the company's full-year revenue in 2017.

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Several analysts pointed to the traditionally cyclical nature of mainframe revenues, which tend to surge for 2-4 quarters after the launch of a new launch before falling off.

"Thus quarter was another important step in the right direction with 2018 a major prove me year for IBM to show the turnaround story is viable, which we believe it is, albeit at a snail-like pace", Ives wrote.

UBS analyst Steve Milunovich reacted to the IBM earnings report by saying he was feeling worse near term but "somewhat better long term". Excluding the currency gain, the company's sales rose 1 percent.

In the fourth quarter, IBM acquired consulting agency Vivant Digital, settled a patent lawsuit with Priceline and said Daimler AG, JPMorgan Chase and Samsung are collaborating with the company on quantum computing technology.

The strategic imperatives will continue to grow "as we embed cognitive and cloud in more of what we offer", Schroeter said.

The enactment of the Tax Cuts and Jobs Act in December 2017 resulted in a one-time charge of $5.5 billion in the fourth quarter. That bill also included "the revaluation of deferred tax assets and liabilities", we're told.

Adjusted earnings do not include a $5.5 billion non-cash charge related to the new US tax law.

During a conference call, IBM said that it is expecting its earnings per share to be a minimum of $13.80 during 2018, excluding special items. The company will have an annual effective tax rate of 16 percent, plus or minus 2%, inclusive of the tax reform, Kavanaugh said.


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