IBM reported quarterly earnings Tuesday. The company beat on revenue by $370 million and beat on eps by $0.06. The market did not like the results and the stock fell over 7% Wednesday. Below is my takeaway on the results.
Revenue Growth Was Solid
In the past IBM was known for reporting a consistent decline in its top line. The transition from a focus on hardware to one of software and services has not been an easy one. IBM CEO Ginny Rometty has made the hard decisions and the company is finally making the transition. Its online offerings have also helped the company gain traction on its top line. Q1 2018 revenue of $19.1 billion was up 5% Y/Y. This followed a 4% increase in Q4 2017.
Four of IBM’s five operating segments realized single-digit revenue growth. Revenue from Cognitive Systems (23% of total revenue) was up 6% Y/Y. This segment reflects growth in Watson solutions and security, and analytics. Technology Services & Cloud (43% of total revenue) revenue was up 5%, driven by digital offerings. Systems (8% of total revenue) experienced revenue growth in the high single-digits. IBM Z performance was strong, driven by servers that offer secure cloud infrastructures; however storage declined after several quarters of consecutive growth. This was a sea change from Q4 when Systems revenue grew by over 30%. In my opinion, Systems was a disappointment this quarter.
Top notch journalism as usual Jack. Winter of the most headlines containing Question marks. Restaurant revenue, golf revenue, gas revenue, hotel revenue, real estate, wine revenue, etc.yup, no benefit to anyone other than the drivers. But, please refer to them as aliens..very weak Jack, even for you. Publisher: Mike how goes the job at Boston Pizza? Lot of hype on the hiring nothing much said on the departure. Nothing wrong with ??? Mike I am the “winter writer of most headlines