IBM CEO Arvind Krishna speaks at a panel session at the World Economic Forum on January 17, 2023 in Davos, Switzerland.
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- Earning: $3.60 per share, adjusted, versus the $3.60 expected by analysts, according to Refinitiv.
- Revenue: $16.69 billion, versus $16.4 billion as analysts were expecting, according to Refinitiv.
Analysts had expected IBM’s total revenue to decline for the first time in two years, but it remained flat, according to a statement. Net income increased 16% to $2.71 billion.
The company plans to cut about 3,900 jobs, representing 1.5% of IBM’s workforce, CNBC confirmed. Bloomberg Told earlier about the cut. IBM said it expected to record a first-quarter charge of $300 million, linked to the divestment of its managed infrastructure business, and its Watson health care unit.
IBM’s software segment posted $7.29 billion, which worked out to an increase of about 3% and was above the $7.12 billion consensus among analysts polled by StreetAccount.
The company reported consulting revenue of $4.77 billion, up 0.5% and slightly below StreetAccount’s consensus of $4.8 billion.
IBM’s infrastructure segment generated $4.48 billion, up nearly 2% and above the $4.18 billion StreetAccount consensus. Revenue from IBM’s Z Systems line of mainframe computers jumped 16% after the Z16 model became generally available last May.
With respect to guidance, IBM called for 2023 revenue growth in constant currency — IBM finance chief Jim Kavanaugh said on a conference call that it would be prudent to expect mid-single-digits to be on the low end of its model. Revenue growth – and nearly $10.5 billion in free cash flow. In 2021, IBM announced a goal of delivering $35 billion in free cash flow between 2022 and 2024, and free cash flow totaled $9.29 billion in 2022.
Kavanaugh said the company is also extending the useful life of servers and networking equipment through January 1, which will increase pre-tax earnings by more than $200 million. Amazon And Microsoft Similar changes have been made in the past as well.
During the quarter, IBM revealed plans to invest $20 billion in New York’s Hudson Valley region over the course of a decade. The company also announced next generation quantum computer 433-qubits and acquisition Octo’s, One of the One a handful of consulting companies IBM has been absorbed since spinning Kindril In 2021.
IBM outperformed its tech peers in 2022, the worst year for the Nasdaq since 2008. IBM rose 11% last year and was one of only two US tech companies valued at $50 billion or more to turn a profit. The other was VMware, which it agreed to acquire in May. broadcom for $61 billion.
Executives will discuss the results with analysts on a conference call beginning at 5 p.m. ET.
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