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IBM (IBM) posts Q4 beats, strong 2022 outlook as shares rise 6%
IBM said that it expects to deliver “mid-single-digit” revenue growth in 2022 after impressing investors with a strong Q4 report that helped shares to rise 6%.
Tech giant IBM (IBM) traded 6% higher in New York on Tuesday on a strong Q4 report that included earnings and revenue beats and a positive outlook for 2022.
After Monday’s close, IBM said that its revenue for the three months to 31st December rose 8.5% from a year ago to $16.7bn to comfortably beat the $15.96bn Wall Street consensus.
Adjusted earnings followed suit, rising to $3.35 per share to ease past the pre-report forecasts of $3.30.
IBM CEO Arvind Krishna said that its “hybrid cloud and AI strategy” paved the way for a strong quarter as its cloud and consulting divisions thrived with +10% growth a piece.
While the New York-based multinational is going head to head with rivals including Microsoft (MSFT) and Amazon (AMZN) in the cloud market, it looks set for a robust year.
Krishna sees IBM delivering around 4% to 6% revenue growth in 2022, in addition to a “low double-digit” profit margin, and with cash flow of around $10.25bn.
He added: “We are starting to see signs of sales productivity improvements, with average productivity per technology seller increasing from the first to the second half.”
Reacting to IBM’s report, BMO Capital Markets analyst Keith Bachman said that there are still concerns about software growth, but they are pleased with how consulting and cloud services are developing.
Bachman is not overly enthusiastic though, as he reiterated a ‘market perform’ rating and $155 price target.
IBM shares are down for the last six months, but Tuesday’s advance reduced those losses.
By mid-afternoon, IBM was trading 5.57% up at $136.03, which is on the upside of its 52-week low of $112.48.
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