IBM Q4 Results Beats Wall Street Expectations; Shares Up 5%

(RTTNews) - Shares of International Business Machines Corp. (IBM) gained over 5% in extended session on Monday after the software company's earnings and revenues for the fourth quarter trumped Wall Street estimates, driven by hybrid cloud revenues.

Armonk, New York-based IBM reported fourth-quarter profit of $2.33 billion or $2.57 per share, up from $1.36 billion or $1.51 per share last year.

Excluding items, IBM's adjusted earnings from continuing operations were $3.35 per share for the period, up from $1.88 per share last year. Analysts polled by Thomson Reuters expected earnings of $3.14 per share. Analysts' estimates typically exclude special items.

IBM's fourth-quarter revenues rose 6.5 percent to $16.70 billion from $15.68 billion last year. Analysts had a consensus revenue estimate of $15.98 billion for the quarter.

"We increased revenue in the fourth quarter with hybrid cloud adoption driving growth in software and consulting," said Arvind Krishna, IBM chairman and chief executive officer. "Our fourth-quarter results give us confidence in our ability to deliver our objectives of sustained mid-single digit revenue growth and strong free cash flow in 2022."

Software, including Hybrid Platform & Solutions, Transaction Processing, revenues were up 8.2 percent to $7.3 billion, while Consulting revenues, which includes Business Transformation, Technology Consulting and Application Operations, rose 13.1 percent to $4.7 billion. Infrastructure revenues, which includes Hybrid Infrastructure, Infrastructure Support, dropped 0.2 percent to $4.4 billion.

The company said software and consulting growth were driven by hybrid cloud adoption. Hybrid cloud revenues were $6.2 billion for the quarter, up 16 percent.

IBM closed Monday's trading at $128.82, down $0.53 or 0.41%, on the NYSE. The stock, however, gained $7.29 or 5.66%, in the after-hours trading.