April 19 (Reuters) - IBM expects to hit the top end
of its revenue growth forecast for 2022, the company said on
Tuesday, even as it flagged a $300 million knock to revenue from
the suspension of its business in Russia.
Servers from IBM, Dell Technologies Inc and Hewlett
Packard Enterprise Co dominate the market in Russia. IBM
suspended its operations in March following Moscow's invasion of
The impact from Russia equates to less than "half a percent"
of total revenue last year, Chief Financial Officer James
Kavanaugh said, but added IBM expects a $200 million hit to 2022
Total revenue rose 8% to $14.20 billion in the first
quarter, beating estimates of $13.85 billion according to
Refinitiv data. Adjusted profit of $1.40 per share also topped
expectations of $1.38.
"The fact that IT giant IBM came in with good numbers
despite the Ukraine crisis and Netflix's negative
results sets an encouraging tone for enterprise software and
tech companies reporting next week," said Dan Morgan, senior
portfolio manager at Synovus Trust.
Shares of the company were up 3% in extended trading.
Having shed its large and laggard IT-managed infrastructure
business last year, IBM has bet on high-growth software and
consulting businesses with a focus on the so-called "hybrid
Cloud revenue jumped 14% to $5 billion during the reported
The century-old company said it expects to hit the higher
end of its mid-single-digit revenue growth forecast for this
year, with the growth expected to come from the consulting
Analysts on average expect annual revenue of $60.69 billion,
implying a year-on-year rise of 5.8%.
Kavanaugh told Reuters that clients pushing to digitize
operations is fueling strong demand for the consulting business,
including in Europe despite the Ukraine crisis.
He, however, flagged wage inflation pressures in the
(Reporting by Chavi Mehta in Bengaluru; Editing by Krishna
Chandra Eluri and Sriraj Kalluvila)