IBM reports first revenue growth after nearly five six years

Now that streak has finally ended - a positive sign as the company faces competition from faster-growing companies like Amazon, Google and Microsoft.

However, a one-time tax charge of $5.5 billion related to changes in the United States tax code caused IBM to swing to a loss of $1.14 in GAAP earnings per share versus earnings of $4.73 per share in the year ago period. The charge encompasses several elements, including a tax on accumulated overseas profits and the revaluation of deferred tax assets and liabilities. Including that charge, the tax rate for the quarter was 124%, and it was 49% for all of 2017.

"This 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", GBH Insights analyst Daniel Ives said.

Analysts expected some growth in revenue during the fourth quarter to be generated from sales of the z14 mainframe computer, and that took place during the entire quarter.

Kavanaugh said IBM would continue to "maintain a high level of investment" in 2018 as it boosts its capabilities on its high-margin "strategic imperatives" such as cloud, mobile, cybersecurity and data analytics.

IBM's quarterly profit, excluding a charge related to the recent USA tax overhaul, just edged past analysts' estimates and the company did not detail the expected impact of the new tax rates on current year's results. In the final three months of 2017, Big Blue's revenues grew 3.5 per cent compared to year-ago quarter.

IBM has been moving away from its shrinking hardware and software businesses to what it calls "strategic imperatives", which includes the contribution of cloud computing - where companies use a remote network of data centres instead of their own hardware to cut costs.

"Our strategic imperatives revenue again grew at a double-digit rate and now represents 46 percent of our total revenue, and we are pleased with our overall revenue growth in the quarter", said Ginni Rometty. Revenue from its systems division, which includes mainframes, rose 32 percent to $3.3 billion. Its adjusted profit of $5.18 per share was a penny above analysts estimates.

IBM (NYSE:IBM) released its latest earnings report after closing bell tonight. Analysts expect $2.28 in earnings per share, excluding certain items, for the first quarter, according to Thomson Reuters.

Net income was $5.8bn including the tax write-down, but otherwise would have been $12.9bn (non-GAAP).

Tiffany's same-store sales in the Americas rose six percent in the holiday season, helping raise the company's 2017 full-year forecast for sales and earnings. IBM also said its capital expenses will rise.

IBM shares were down 2.8%, near 162.80, during afternoon trading on the stock market today. IBM collectively refers to the new business operations as strategic imperatives.


Popular
  • MLK Day, civil rights and the racial divide in the US

    MLK Day, civil rights and the racial divide in the US

    Brandon Tucker, right, during the annual scholarship breakfast hosted by the local UT chapter of Alpha Phi Alpha at The Pinnacle. Scholarship recipient Keion Devalt II, left, receives his plaque from Nathaniel Young , left, and chapter president Rev.
    GOP Retirements Mount as Rep Issa Bows Out

    GOP Retirements Mount as Rep Issa Bows Out

    But the Democratic Congressional Campaign Committee suggested otherwise. "We are truly grateful for his service", said Rep. Hillary Clinton won the district by almost 7 points in the 2016 election.
    Seoul to announce follow-up measures to 'comfort women' deal review on Tuesday

    Seoul to announce follow-up measures to 'comfort women' deal review on Tuesday

    To Japan's chagrin, a similar statue went up in front of the consulate in Busan soon after. Some former comfort women have urged Seoul to refund the money as a sign of protest.
  • Rajon Rondo Rips Isaiah Thomas' Celtics Tenure:

    Rajon Rondo Rips Isaiah Thomas' Celtics Tenure: "What Has He Done?"

    Pierce then said that Thomas blew his chance to be honored by the Celtics. "Like, I just wanted my family to be here to see it". Why Pierce can't allow 90 seconds in the pregame introductions for Thomas to get his props is beyond me.
    Flu-related deaths across state almost  double since past year

    Flu-related deaths across state almost double since past year

    You should also be sure to wash your hands often, avoid touching your face, cover your cough and stay home when you're sick. It's too soon to jump to conclusions, but "we are obviously concerned that this may be a more severe flu season", she said.
    Natural disaster  of 7.6 magnitude strikes off Central America: USGS

    Natural disaster of 7.6 magnitude strikes off Central America: USGS

    The natural disaster rattled window in the Honduran capital of Tegucigalpa over 320 miles away and was also felt as far as Mexico. The reports that the 7.6 magnitude makes this one of the most powerful earthquakes to hit the Caribbean in modern day history.
  • India beat Australia by 100 runs in Group B

    India beat Australia by 100 runs in Group B

    Kamlesh Nagarkoti and Shivam Mavi picked three wickets apiece to wrap up Australia's innings in the 43rd over itself. Defending a total of 328, Indian pacers bowled exceptionally well and produced some great pace.
    Rep. Steve Alford quits posts after remarks about blacks

    Rep. Steve Alford quits posts after remarks about blacks

    Alford said somebody at the event called him a racist, but claimed, " I'm about as far from being a racist as I could get ". Alford is the chair of the state's Child Welfare System Task Force and the House Committee on Children and Seniors.
    Platelet, blood donors needed

    Platelet, blood donors needed

    Many donors have planned to take part in the day's collection with an appointment, but walk-ins also will be taken on Monday. Eligible donors with types O, A negative and B negative blood are urged to make a Power Red donation, where available.
  • Australian Open: Nadal, Kyrgios set for 2nd-round matches

    Australian Open: Nadal, Kyrgios set for 2nd-round matches

    Kostyuk is also the youngest player to reach the third round at any Slam since Mirjana Lucic-Baroni did so at the 1997 US Open . Switzerland's Belinda Bencic crashed out of the competition after losing 6-1, 6-3 to Thai qualifier Luksika Kumkhum.
    Mike Pettine Headed to Green Bay as Packers Defenseive Coordinator

    Mike Pettine Headed to Green Bay as Packers Defenseive Coordinator

    From there, he served several years as a head coach in high school football before taking a job with the Baltimore Ravens in 2002. Pettine eventually worked his way up to become a defensive assistant, and later an outside linebackers coach in Baltimore.
    Trump Voter Roseanne Barr Plays Herself in Sitcom Revival

    Trump Voter Roseanne Barr Plays Herself in Sitcom Revival

    Barr herself has spoken in support of Trump, but the show's producers said the series does not advocate a political stance. But Barr continued with her response, which had to do with why she didn't vote for Hillary Clinton .

CONNECT